includes 10-year forecasts to 2019 -...

Q3 2010www.businessmonitor.com

pharmaceuticals & healthcare report

issN 1748-2089published by Business monitor international ltd.

paKistaNINCLUDES 10-YEAR FORECASTS TO 2019

Business Monitor International Mermaid House, 2 Puddle Dock, London, EC4V 3DS, UK Tel: +44 (0) 20 7248 0468 Fax: +44 (0) 20 7248 0467 Email: [email protected] Web: http://www.businessmonitor.com

© 2010 Business Monitor International. All rights reserved. All information contained in this publication is copyrighted in the name of Business Monitor International, and as such no part of this publication may be reproduced, repackaged, redistributed, resold in whole or in any part, or used in any form or by any means graphic, electronic or mechanical, including photocopying, recording, taping, or by information storage or retrieval, or by any other means, without the express written consent of the publisher.

DISCLAIMER All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Business Monitor International accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the publication. All information is provided without warranty, and Business Monitor International makes no representation of warranty of any kind as to the accuracy or completeness of any information hereto contained.

PAKISTAN PHARMACEUTICALS & HEALTHCARE REPORT Q3 2010 INCLUDING 5-YEAR AND 10-YEAR INDUSTRY FORECASTS BY BMI

Part of BMI’s Industry Survey & Forecasts Series

Published by: Business Monitor International

Copy deadline: May 2010

Pakistan Pharmaceuticals & Healthcare Report Q3 2010

© Business Monitor International Ltd Page 2



CONTENTS

Executive Summary ......................................................................................................................................... 5

SWOT Analysis ................................................................................................................................................. 6

Pakistan Pharmaceutical Industry SWOT .............................................................................................................................................................. 6 Pakistan Political SWOT ....................................................................................................................................................................................... 7 Pakistan Economic SWOT ..................................................................................................................................................................................... 8 Pakistan Business Environment SWOT .................................................................................................................................................................. 8

Pharmaceutical Business Environment Ratings .......................................................................................... 9

Table: Asia Pacific Pharmaceutical Business Environment Ratings, Q310 ........................................................................................................... 9 Limits Of Potential Returns.................................................................................................................................................................................. 10 Risks To Realisation Of Returns .......................................................................................................................................................................... 10

Pakistan – Market Summary ......................................................................................................................... 12

Regulatory Regime ......................................................................................................................................... 14

Recent Regulatory Developments ........................................................................................................................................................................ 15 Intellectual Property Regime ............................................................................................................................................................................... 16 Shortcomings Of The Intellectual Property Environment .................................................................................................................................... 16 Counterfeit Drugs ................................................................................................................................................................................................ 17 Pricing And Reimbursement Regime .................................................................................................................................................................... 18 Table: The Formulae For Pharmaceutical Pricing In Pakistan ........................................................................................................................... 21

Industry Trends And Developments ............................................................................................................ 22

Epidemiology ....................................................................................................................................................................................................... 22 Non-Communicable Diseases .............................................................................................................................................................................. 22 Communicable Diseases ...................................................................................................................................................................................... 23 Recent Public Health Developments .................................................................................................................................................................... 24 Healthcare System ............................................................................................................................................................................................... 25 Table: Pakistan – Key Healthcare Statistics, 2007 (‘000 people, unless otherwise stated) .................................................................................. 26 Healthcare Insurance .......................................................................................................................................................................................... 27 Medical Tourism .................................................................................................................................................................................................. 27 Traditional Medicine ........................................................................................................................................................................................... 28 Retail Sector ........................................................................................................................................................................................................ 29 Research And Development ................................................................................................................................................................................. 29 International Cooperation ................................................................................................................................................................................... 30 Medical Devices................................................................................................................................................................................................... 31

Industry Forecast Scenario ........................................................................................................................... 33

Pharmaceutical Market Forecast ........................................................................................................................................................................ 33 Key Growth Factors – Industry............................................................................................................................................................................ 35 Key Growth Factors – Industry............................................................................................................................................................................ 35 Key Growth Factors – Macroeconomic ............................................................................................................................................................... 36 Pakistan – Economic Activity .............................................................................................................................................................................. 38 Prescription Drug Market Forecast ..................................................................................................................................................................... 39 Patented Drug Market Forecast .......................................................................................................................................................................... 41 Generic Drug Market Forecast ............................................................................................................................................................................ 42 OTC Medicine Market Forecast .......................................................................................................................................................................... 43 Pharmaceutical Trade Forecast .......................................................................................................................................................................... 44 Other Healthcare Data Forecasts ........................................................................................................................................................................ 46 Key Risks To BMI’s Forecast Scenario ................................................................................................................................................................ 47



Competitive Landscape ................................................................................................................................. 48

Pharmaceutical Sector ......................................................................................................................................................................................... 48 2008 Financial Snapshot Of Pakistani Drugmakers Listed On The Karachi Stock Exchange (US$mn) .............................................................. 48 Domestic Pharmaceutical Industry ...................................................................................................................................................................... 49 Foreign Pharmaceutical Industry ........................................................................................................................................................................ 49 Recent Pharmaceutical Sector Developments ...................................................................................................................................................... 50

Company Monitor ........................................................................................................................................... 52

Indigenous Manufacturers ........................................................................................................................................................................................ 52 Searle Pakistan .................................................................................................................................................................................................... 52 Hilton Pharma ..................................................................................................................................................................................................... 54 Efroze Chemical Industries .................................................................................................................................................................................. 55 Ferozsons Laboratories ....................................................................................................................................................................................... 56 Getz Pharma ........................................................................................................................................................................................................ 58 Pacific Pharmaceuticals ...................................................................................................................................................................................... 60

Leading Multinational Manufacturers ...................................................................................................................................................................... 62 GlaxoSmithKline (GSK) ....................................................................................................................................................................................... 62 Pfizer ................................................................................................................................................................................................................... 65 Abbott Laboratories ............................................................................................................................................................................................. 66 Novartis ............................................................................................................................................................................................................... 68 Sanofi-Aventis ...................................................................................................................................................................................................... 70 Wyeth ................................................................................................................................................................................................................... 72

Country Snapshot: Pakistan Demographic Data ........................................................................................ 74

Section 1: Population ........................................................................................................................................................................................... 74 Table: Demographic Indicators, 2005-2030 ........................................................................................................................................................ 74 Table: Rural/Urban Breakdown, 2005-2030 ....................................................................................................................................................... 74 Section 2: Education and Healthcare .................................................................................................................................................................. 75 Table: Education, 2002-2005 .............................................................................................................................................................................. 75 Table: Vital Statistics, 2005-2030 ........................................................................................................................................................................ 75 Table: Employment Indicators, 2001-2006 .......................................................................................................................................................... 76 Section 3: Labour Market And Spending Power .................................................................................................................................................. 77 Table: Consumer Expenditure, 2000-2012 (US$) ................................................................................................................................................ 77 Table: Average Annual Manufacturing Wages, 2000-2012 ................................................................................................................................. 77

BMI Methodology ........................................................................................................................................... 78

How We Generate Our Pharmaceutical Industry Forecasts ..................................................................................................................................... 78 Pharmaceutical Business Environment Ratings Methodology .................................................................................................................................. 79

Ratings Overview ................................................................................................................................................................................................. 79 Table: Pharmaceutical Business Environment Indicators ................................................................................................................................... 80 Weighting ............................................................................................................................................................................................................. 81 Table: Weighting Of Components ........................................................................................................................................................................ 81

Sources ..................................................................................................................................................................................................................... 81

Forecast Tables .............................................................................................................................................. 82



Executive Summary

Pakistan's US$1.62bn pharmaceutical market is the 10th largest in Asia Pacific, behind the Philippines

(US$2.58bn) and ahead of Vietnam (US$1.53bn). Annual per-capita spending on medicine is US$10,

which is far below the regional average of US$142. Market access is challenging and operational risks are

high.

A key feature of Pakistan’s pharmaceutical market is the low price of medicine. In April 2010, Khawaja

Shahzeb Akram, the vice chairman of Pakistan Industrial and Traders Association Front (PIAF) and

convener of LCCI Standing Committee on Pharmaceuticals, ruled out any increase in medicine prices. He

said the health ministry, rather than the Pakistan Pharmaceutical Manufacturers Association (PPMA), is

authorised to increase prices. He added that, while the Ministry of Health has frequently considered price

increases, they have remained the same for the last 8-10 years.

Healthcare is not a priority in Pakistan, as demonstrated by the country’s low expenditure as a percentage

of GDP. However, recent legislation suggests to BMI a change in attitude towards the benefits of medical

services on society. In April 2010, members of the National Assembly in Pakistan introduced three

healthcare bills on Private Members Day (March 30). The new bills are ‘The Pakistan Private Hospitals,

Clinics and Other Private Healthcare Units Regulatory Authority Bill 2010’, the ‘Foreigners

(Amendment) Bill 2010’ and the ‘Constitution (Amendment) Bill 2010’.

As seen in most developing countries, counterfeit medicines are major problem in Pakistan. In January

2010, Pakistan's Interior Minister, Rehman Malik, announced at the National Assembly that 50% of the

total medicines available in the country are considered either fake or of unacceptable quality. Malik added

that the government requires effective legislation to punish the offenders and control the threat that

counterfeiting and sub-standard manufacturing poses. The house approved two resolutions that

necessitate the government undertaking action against the sale of these drugs in the country.

BMI does not expect many foreign firms to enter Pakistan's pharmaceutical market over the medium-

term. Aside from the precarious political situation, the rupee is projected to weaken further over the next

five years. Our Country Risk team expects the US$:PKR exchange rate to deteriorate from 1:88 in 2010

to 1:110 in 2014.

This means prospects for local players are much more promising than those for companies that repatriate

revenues. BMI's pharmaceutical expenditure forecast model reveals that medicine sales will increase

from PKR132bn (US$1.62bn) in 2009 to PKR196bn (US$1.78bn) in 2014. This equates to compound

annual growth rates (CAGRs) of 8.25% in local currency terms and 1.96% in US dollar terms. By 2019,

we expect the pharmaceutical market to reach a value of PKR290bn (US$2.12bn).



SWOT Analysis

Pakistan Pharmaceutical Industry SWOT

Strengths Significant local pharmaceutical manufacturing industry with capacity to supply much of the domestic market.

The recent reduction of import duty on raw materials for a number of pharmaceuticals to encourage imports as well as to boost domestic production.

The WTO’s decision to facilitate the import of low-cost generics to poorer countries.

Macroeconomic stability gradually being restored in the country through a series of structural reforms.

Domestic industry restricted by limits on contract manufacturing and certain tax and similar concessions designed to encourage FDI.

Weaknesses Domestic patent law notably below international standards, with illegal copying, counterfeiting and law enforcement continuing to present significant problems for the international pharmaceutical industry.

Complex drug-pricing policy, biased towards local producers and acts to suppress prices.

Local manufacturers dependent on imported raw materials.

Counterfeits accounting for a large proportion of the market.

Healthcare spending predominantly funded out of pocket.

Slow registration times hampering access to modern medicines.

Foreign investment discouraged by a corporate income tax rate of 35% and a 15% tax on sales.

Lack of a comprehensive health insurance system.

Opportunities As healthcare becomes modernised, demand is increasing for low-cost treatment.

Improvement of government-run scheme to dispense essential medicines free of charge from counters in government hospitals, which had previously been abused.

Gradual improvement of patient purchasing power and the overall economic climate.

Government efforts to encourage biotechnology initiatives and foreign collaboration in this area.

Slashing of import duties to stimulate foreign involvement.

New regulatory body should improve registration process for pharmaceuticals and ensure the quality of all medicines.

Threats Government resistance to aligning domestic patent law with international standards.

Volatile political and economic climate continuing to pose risks in terms of local investment.

Uncertainty over the availability of energy and the absence of adequate and efficient transport facilities.

Lack of concerted efforts to promote indigenous research and development (R&D) programmes.

Recent decision to ban pharmaceutical imports continues to show bias towards the local industry.

Questionable quality of some of Pakistan-made medicines will continue to negatively impact on the image of the industry as a whole.

The new essential drugs list will not contain any patented drugs, thus negatively impacting on the patented drugs sales.



Pakistan Political SWOT

Strengths Pakistan has been labelled a 'major non-NATO ally' by the US, thanks to its leading role in the US-led ‘war on terror’. Pakistan's strategic importance ensures that the West maintains an active interest in safeguarding its stability, as reflected in continued pledges of financial support from the 'Friends of Pakistan' group of countries.

Pakistan's strong relationship with China gives it an alternative geopolitical and economic anchor to the Western world.

Weaknesses Civilian institutions are weak. Former president Pervez Musharraf curbed the powers of parliament during his reign (1999-2008), and these changes have as yet not been revoked by President Asif Ali Zardari.

Political parties tend to be dominated by personalities, families, or patronage groups rather than being defined by policies.

Relations with India are still tense. The border dispute between the two nuclear-armed neighbours, which have gone to war three times since they were 'partitioned' after independence, still looks intractable with the November 2008 attacks in Mumbai – which are thought to have been orchestrated by Pakistani militant groups – having complicated relations further.

Opportunities Pakistan could build stronger civilian institutions through meaningful democratic reform under new president Asif Ali Zardari. There have so far been positive indications from new army chief Ashfaq Parvez Kayani that the military will become less involved in politics, but recent sabre rattling with India could once again strengthen the hand of the army.

Regular peace talks with India, although these have been put on hold on the back of the November 2008 Mumbai attacks, provide Pakistan's leaders with an opportunity to ease tensions in one of the world's most dangerous nuclear flashpoints.

Threats Escalating violence by militants opposed to Pakistan's participation in the US-led ‘war on terror’ poses a key risk to stability. Zardari will have to balance the government's dependence on financial and military aid from Washington against the risk of rousing the wrath of the population if he appears too accommodating to US demands.

Militants from neighbouring Afghanistan tend to use Pakistan as a safe haven. This has led the US to targeting militants on Pakistani soil – through airstrikes by pilotless drones – and talk of more aggressive action in future.



Pakistan Economic SWOT

Strengths Continuing structural reforms have strengthened Pakistan's economy, as have fairly buoyant foreign investment inflows. Real GDP expanded by an average of 7.0% for FY2003/04-2007/08, although this brisk pace of expansion is unlikely to be attained over the next few years.

Pakistan's vast population (over 160mn people) means that once the purchasing power of people starts to improve there could potentially be a sizeable market for consumer-orientated businesses.

Weaknesses Pakistan suffers from chronic trade and fiscal deficits, and has a low level of foreign currency reserves. This leaves the economy vulnerable to external shocks and dependent on aid and loans from multilateral institutions and bilateral partners.

Despite rapid economic growth in recent years, Pakistan's population remains poor. The IMF estimates per capita income at US$995 in 2008, or US$2,754 in purchasing power parity terms.

Opportunities Rising rates of urbanisation – with the UN forecasting the proportion of city dwellers climbing from 34.9% of the population in 2005 to more than 50% by 2035 – should continue to serve as a key driver of economic growth.

Pakistan's close geopolitical ties with China should ensure that it benefits from the latter's rise through growing trade and investment.

Threats Public discontent with the government lingers, posing a threat to the position of new president Asif Ali Zardari. This could jeopardise the economic reform process under way.

Pakistan's balance of payments remains vulnerable to a spike in oil prices, as vividly illustrated by the ballooning import bill in 2008. Pakistan imports more than 50mn barrels of oil a year to satisfy local demand for fuel products and record-high prices in 2008 led to a widening of the trade deficit.

Pakistan Business Environment SWOT

Strengths Pakistan has one of the most liberal foreign investment regimes in South Asia. One-hundred percent foreign equity is permitted in the manufacturing and infrastructure sectors.

Continuing reform of Pakistan's trade regime is reducing tariff barriers. Duty on capital goods, plant and machinery not manufactured locally is now just 5%, having earlier been in a range of 5-25%.

Weaknesses Failing infrastructure, bureaucratic delays and widespread corruption are key concerns for investors looking to do business.

Intellectual property rights are poorly enforced. Pakistan, a leading producer of counterfeit goods, remains on the Office of the US Trade Representative's Priority 301 Watch List.

Opportunities A pro-privatisation climate has been engendered, making further sell-offs of state firms possible, although we expect the rate of privatisations to be slow and inconsistent.

Pakistan is seeking to attract more investment from the Gulf region, by benefiting from the latter’s surging oil wealth and by tapping into the burgeoning Islamic finance market.

Threats Anti-Western militants have been known to target foreign workers and businesses, with recent reports suggesting that extortion of multinational companies could be on the rise.

Pakistan's uncertain security environment makes it a high-risk destination in the eyes of investors.



Pharmaceutical Business Environment Ratings

Table: Asia Pacific Pharmaceutical Business Environment Ratings, Q310

Limits of potential returns Risks to realisation of

returns

Pharmaceutical

market Country

structure Limits Market

risk Country

risk Risks Pharma

rating Regional

ranking

South Korea 67 60 65 70 69 70 66.9 1=

Australia 57 73 61 72 82 76 66.9 1=

Japan 60 70 63 73 72 73 66.7 3

China 67 43 61 67 55 62 61.3 4

Singapore 37 67 44 80 88 83 59.8 5

Taiwan 50 53 51 70 64 68 57.6 6

Hong Kong 40 70 48 67 78 71 57.0 7

India 60 40 55 60 53 57 55.9 8

Malaysia 40 57 44 70 68 69 54.2 9

Thailand 60 43 56 37 61 47 52.1 10

Philippines 50 57 52 43 48 45 49.1 11

Indonesia 53 47 52 40 41 40 47.2 12

Vietnam 47 40 45 40 49 43 44.4 13

Bangladesh 43 30 40 43 35 40 40.0 14

Pakistan 27 47 32 33 44 37 34.0 15

Cambodia 33 20 30 30 37 33 31.2 16

Regional Average 49 51 50 56 59 57 52.8

Scores out of 100, with 100 the best. Source: BMI

In BMI’s Asia Pacific Pharmaceutical Business Environment Ratings (BER) for Q310, Pakistan has

dropped one place compared with the previous quarter. The South Asian country is now the 15th most

attractive pharmaceutical market in the region, behind Bangladesh and ahead of Cambodia. A negative re-

assessment of the value and growth of the pharmaceutical market caused Pakistan’s BER downgrade. The

country scores poorly for all indicators and this situation is not likely to change soon.



Limits Of Potential Returns

Pharmaceutical Market and Country

Structure scores are weighed and

combined to form Limits to Potential

Returns. Pakistan’s score of 32 is the

second lowest in the table in this quarter.

Pharmaceutical Market

The small size of the country’s total

market (at around US$1.6bn in 2009) and

low per-capita spending – just under

US$10 a year – represents major

disincentives to foreign participation,

especially in terms of direct investment.

However, this does not tell the complete story. Pakistan has a sizeable elite and growing middle class,

both of which can afford innovative medicine. Per-capita spending is low due to the vast population

(161mn), including a significant number of rural poor, which pulls down average spending.

Country Structure

Pakistan has the world’s sixth largest population, placing it ahead of Russia and just behind Brazil.

Urbanisation is a major trend, with city dwellers making up over a third of its population. Given the

significant rise in birth rates since 1980, the pensionable population is comparatively low. Consequently,

Pakistan scores a respectable 47 (out of the possible 100) for this category, which is higher than in some

other regional markets surveyed by BMI – including the much higher-placed China.

Risks To Realisation Of Returns

Market and Country Risk are weighed and combined to form the score for Risks to Realisation of

Returns. Pakistan’s score of 37 remains the lowest in the table, indicating major risks facing

multinationals operating or wishing to operate in the country.

Market Risks

Counterfeit medicines are endemic due to the low purchasing power of consumers and campaigns against

the illegal trade are commonplace. The government’s pricing mechanisms are not transparent and the

approval process is biased towards domestic manufacturers. As a result, Pakistan’s score for this category

is only 33. Once again, this is the lowest score in the table.

Country Risk

Despite the recent political turmoil, the country scores relatively highly for policy continuity. Officially a

federal republic, Pakistan has long had alternating periods of electoral democracy and authoritarian

Business Environment Ratings By Sub-Sector Score

0

100

PharmaceuticalM arket

Country Structure

M arket Risk

Country Risk

Pakistan Scores Regional Scores

Scores out of 100. Source: BMI



military government. In terms of economic structure and bureaucracy, plenty of work needs to be done,

especially in the tribal border regions with Afghanistan, where access to medicine can be a problem.



Pakistan – Market Summary

Pakistan's US$1.62bn pharmaceutical

market is the 10th largest in Asia Pacific,

behind the Philippines (US$2.58bn) and

ahead of Vietnam (US$1.53bn). Annual

per-capita spending on medicines is

US$10, which is far below the regional

average of US$142. Market access is

challenging and operational risks are

high.

The pharmaceutical regulatory regime in

Pakistan is typical of an emerging market

and far below international standards. In

the public sector, medicines are procured

through large-scale tenders and prices are

set very low to facilitate access to healthcare. Free medicines are available for the treatment of

thalassaemia, hepatitis, HIV/AIDS and certain cancers. However, in practice, limited volumes of zero-

cost pharmaceuticals are distributed in the country.

Generic drugs account for nearly two-thirds of Pakistan's pharmaceutical market. Within this sub-sector,

the majority of sales are posted by branded generics, mainly due to the high prevalence of counterfeit

medicines in the country. Sales of patented drugs reached US$231mn in 2009 and were mostly consumed

by people on high incomes, leading members of the military and senior civil servants.

While the majority of the 169mn population have access to some form of healthcare, the standard of care

is low, outcomes are poor and reliance on donations from non-government organisations (NGOs) is high.

According to the World Health Organization (WHO), Pakistan spent just 2.9% of GDP on healthcare

during 2008. This figure compares poorly with the regional (5.1%) and global averages (6.7%).

Multinational firms dominate Pakistan's pharmaceutical market, both directly and indirectly. Of the nine

drugmakers listed on the Karachi Stock Exchange (KSE), only three – Ferozsons Laboratories,

Highnoon Laboratories and Searle Pakistan – are locally owned. In terms of sales, UK-based

GlaxoSmithKline is the largest drugmaker operating in Pakistan. Combined sales of the listed companies

were just below US$400mn in fiscal year 2008.

Like most developing countries, Pakistan has negative pharmaceutical trade balance. According to UN

Comtrade, the country imported finished medicines with a value of US$252mn in 2008.The leading

Pharmaceutical Market By Sub-Sector (US$bn)

2009

OTC medicines,

0.319

Patented products,

0.231

Generic drugs, 1.067

Source: IMS Health Asia, Pakistan Pharmaceutical Manufacturers Association (PPMA), BMI



countries of origin were Switzerland (US$54.7mn), China (US$29.5mn), Germany (US$27.6mn), the UK

(US$17.6mn) and France (US$16.1mn).



Regulatory Regime

The main regulatory authority in Pakistan is the Ministry of Health (MoH). All products available on the

domestic market or those to be exported must receive authorisation from it. The basis for market

regulation is the 1976 Drugs Act, which provides for the strict pharmaceutical pricing system.

Additionally, product registration is permitted only if local manufacturing requirements are met, with the

MoH also introducing strict criteria for contract manufacturing. Such a system has often resulted in the

denial of registration applications for new chemical entities.

A new autonomous drug authority, announced in June 2008, is to be created shortly, assuming much of

the responsibility of the existing Drug Registration Board. With start-up funds of PKR4.3bn (US$55mn),

the body will issue production licences and monitor the quality of medicines. The Drug Regulatory

Authority will be tasked with streamlining the registration process for pharmaceuticals and ensuring the

quality of all medicines. The move has been accelerated following a recent high-profile case in the

Supreme Court concerning counterfeit drugs.

The new authority is expected to benefit from superior communications, as well as improved funding.

Responsibilities will also include promoting the rational use of drugs, dealing with drug imports and

exports and overseeing pharmacovigilance. This should help improve overall regulatory standards in the

country, which has little in the way of cohesive infrastructure.

To date, the Drug Registration Board of the Federal Ministry of Health has registered more than 40,000

brand names, comprising more than 1,400 molecules. Not all of those drugs are on the market, for various

reasons, including promotional illegalities. The latter are currently being investigated by a special

commission which aims to make industry-wide recommendations and guidelines on ethical drug

advertising.

Launches of patented drugs are hampered by the fact that registration times can be as long as two years.

Nevertheless, a recent development has seen drugs registered in two major advanced markets

(specifically, the US, the UK, EU, Japan and Switzerland) are processed through a fast-track mechanism

in Pakistan, which skips the expert review and therefore improves registration times.

Since the introduction of the Drugs Act, Pakistan has attempted to introduce GMP and at present is

focusing on the implementation of Good Laboratory Practice (GLP). The measures are designed to

strengthen Pakistan’s exports in overseas markets (which presently number over 70), as well as improving

competitiveness in export tenders against countries such as India and China.

At best, the regulatory environment in Pakistan can be described as difficult, with little in the way of a

cohesive infrastructure. As such, conditions for foreign companies are tough, with strict government



pricing controls being a major barrier to market entry. Illegal copies of branded drugs and other

counterfeit products have a significant market in Pakistan, acting as a further deterrent.

Pharmaceutical Research and Manufacturers of America (PhRMA)’s key issues of concern as listed in its

Special 301 submission for 2010:

No implementation of data protection as required under TRIPS Article 39.3.

The Ministry of Health continues to disregard process patents at the time of registration and the

majority of mailbox applications have not been granted or finally acted upon. Copies of

molecules filed under mailbox applications continue to be permitted to be marketed, as the

original products do not have patent protection in Pakistan.

The Ministry of Health maintains a local manufacturing requirement as a pre-requisite for

product registration.

The Ministry of Health has placed restrictions on toll manufacturing, where they have given June

30, 2010 as its cut off date.

The current government pricing system is non-transparent, and government prices of innovative products

are set at extremely low and arbitrary levels. Government prices have not been revised since 2001 despite

the rapid increase in the inflation rate.

Recent Regulatory Developments

In October 2009, Pakistan’s Federal Health Ministry cancelled the registration of 4,000 imported

medicines, after local industrialists objected to the sale of the medicines in the country. The decision,

taken during a meeting of the Registration Board, chaired by Health Minister Mir Ijaz Hussian Jakhrani,

was made on the basis of the facts that the medicines in question were sold without a guarantee from the

manufacturers and that they were also produced locally. The local industrialists are of the opinion that the

government must ensure the sale of local medicines in the country.

Earlier in 2009, Pakistan’s Health Ministry had authorised the importing of life-saving drugs from China

and India under the free trade agreement, despite the inherent dangers of such a decision in terms of

hampering the development of the domestic drug market. The ministry also ordered the continuation of

imports of finished goods, including anticancer vaccines and thalassaemia drugs, which are not

manufactured in the country. However, there is no set standard in Pakistan to check the quality of these

finished products.



Intellectual Property Regime

Pakistan is a member of the Berne Convention, the Universal Copyright Convention and the World

Intellectual Property Organisation (WIPO), but the country is not a member of the Paris Convention for

the Protection of Industrial Property. As a WTO member, Pakistan is subject to the terms of the Trade-

Related Aspects of Intellectual Property Rights (TRIPS) accord. The US has taken various steps to ensure

that Pakistan complies with its TRIPS commitments, particularly with respect to fulfilling its obligation to

establish a ‘mailbox’ for agricultural, chemical, and pharmaceutical product patent applications.

According to its TRIPS obligations, Pakistan was due to bring its patent law in line with WTO

requirements by the end of 2005, but implementation remains patchy. The government has been criticised

for being unwilling to enforce the regulations fully, owing to the Pakistani population’s dependence on

cheap copy drugs. Furthermore, the costs involved in further aligning domestic processes with

international norms are prohibitive to the government because reorganisation has to take place on a

massive scale. The eradication of the significant trade in counterfeit drugs presents a major task.

Patent protection is a new concept in Pakistan, with legislation introduced only as recently as December

2000 in the Patent Ordinance, amended in October 2002. The changes limited filings of patent to single

chemical entities, restricted patent protection sought for derivates and salts as well as biotechnology-

based inventions, and also abolished use patents.

Although a patent office has recently been established, activity is still at a very early stage. Intellectual

property (IP) remains a cause of disagreement between the government and the industry – in particular

the multinational sector. Specific concerns over the 2002 amendment also include the parallel importation

of molecules patented by originator companies and very lax provisions on compulsory licensing – which

insist that patents be worked in order to ‘transfer…technology’.

However, in recent months, pharmaceutical industry groups in Pakistan have once again renewed their

criticism of the 2002 Patents Amendment Ordinance, claiming that the act dilutes the effectiveness of

patent protection terms in the country’s 2000 Patents Ordinance. Since Pakistan’s adoption of the TRIPS

agreement, the government has issued five IP laws that include the 2000 legislation. Although the low-

cost domestic manufacturing sector has welcomed the greater flexibility afforded by the 2002

amendment, multinational criticism has focused on its ambiguities and the poor enforcement of regulatory

standards.

Shortcomings Of The Intellectual Property Environment

In 2006, the Office of the US Trade Representative (USTR) moved Pakistan from its Priority Watch List

of countries to its lower echelon Watch List, in relation to its compliance with IP standards. Focusing on

pharmaceuticals, it highlights notable deficiencies in the areas of data protection, counterfeiting and

enforcement. In 2007, Pakistan remained on the Watch List, mainly due to the lack of effective protection



against unfair commercial use of data generated to obtain marketing approval. Another main factor was

the failure to prevent the granting of marketing approvals for those drugs infringing patented products.

In 2008, Pakistan was reinstated on the Priority Watch List, alongside eight other countries, as the country

had made little progress in providing effective protection against unfair commercial use of undisclosed

test data. Pakistan remained on the Priority Watch List in 2009, although the USTR acknowledges that

the government is making steps in the right direction, having established an Intellectual Property Office

(IPO) in the country.

Previously, however, in a positive move, the government told the American Business Council (ABC) that

pharmaceutical patents in Pakistan would be respected to a strict degree. During a meeting between the

ABC and the health minister, the main topic of conversation was the pharmaceutical industry – which the

government hopes will become a mainstay of its ambitious economic growth plan. The minister assured

the ABC delegation – which represents the interests of several major pharmaceutical companies,

including Pfizer, Wyeth and Eli Lilly – that Pakistan will fully observe medicine patents. Furthermore,

the minister highlighted the investor-friendly operating climate in the country, particularly the incentives

on offer.

According to local newspaper The Nation, Pakistani drug-makers criticised the proposed change because

it only benefited the ‘big crocodiles’. By automatically giving five years of IP protection to every new

molecule or formulation, competition will be reduced. Moreover, as no challenges are allowed or

application reviews permitted during that period, there is the possibility that counterfeit compounds may

be allowed onto the market after passing just one evaluation.

Pakistan is unique in the South Asian Association for Regional Co-operation (SAARC) for trying to

implement an IP regimen that meets Western standards. Critics say that the updated legislation – coupled

with high commodity prices – will punish the average citizen, as medicine prices will inevitably rise. The

SAARC trade bloc was formed in 1985 by India, Pakistan, Bangladesh, Sri Lanka, Nepal, the Maldives

and Bhutan. In April 2007, Afghanistan became its eighth member.

Counterfeit Drugs

Current patent legislation has permitted the widespread copying of patent-protected, branded products and

also the proliferation of counterfeit products, much to the frustration of research and development (R&D)

based multinationals. Pakistan continues to have severe problems with counterfeit drugs, with the WHO

estimating that 40-50% of drugs in the market are fake or substandard. The country has been ranked 13th

in the world for the production and sale of counterfeits. According to the US drug association PhRMA,

damages caused by IP violations account for around 10.5% of total drug sales to member companies in

Pakistan.



One of the major problems is that Pakistan does not have a comprehensive drug monitoring system. This

is especially damaging, as 60% of the population live in rural areas. Many retail chemists – attracted by

the possibility of huge profits – knowingly supply fake products, while the public does not have sufficient

education to identify which drugs are counterfeit and which are genuine.

An unfortunate consequence of the above situation is the rapidly emerging issue of drug resistance. This

is especially pronounced for malarial treatments. Fake versions of artemisinin often do not have enough

of the active ingredient to kill the malaria parasite, falciparum. However, they provide sufficient exposure

for the pathogen to develop resistance to treatment.

In a positive development, the authorities have recently increased the number of courts dealing with the

production and distribution of counterfeit medicines from nine to 20. Enforcement operations against

manufacturers of counterfeit pharmaceuticals are also being expanded. The MoH has recently deployed

an extra 12 drug inspectors at the federal level, 97 more in the Pakistani Punjab region and eight in Sindh.

However, market-watchers argue that this is still insufficient to fight the illicit trade effectively. Other

measures being discussed are public education initiatives and the creation of more quality testing

laboratories.

Meanwhile, in a move that should help prevent counterfeit drugs from entering the supply chain, the MoH

has announced that it is to procure medicines in federal hospitals through a centralised mechanism. Under

this scheme, large local purchases of medicines will be discouraged, reducing opportunities for

malpractice. The scheme, implemented in FY07, aims to ensure the availability of essential drugs for the

public. Additionally, the MoH has ordered an enquiry into reports that dangerous expired medicines are

regularly being sold. The health minister said that raids on pharmacies will be conducted and ‘elements’

involved in the selling of these products will be brought to justice.

During January 2009, the government of the Punjab in Pakistan was planning to put into effect ‘Drug

Rules 2009’ in order to curtail counterfeit drugs. As per the Drug Act of 1976, wholesalers were not given

any place in the drug supply chain. However, in ‘Drug Rules 2009’, wholesalers are given a place with

the condition that they will be held accountable if counterfeit drugs are found with the retailers they

supply.

Pricing And Reimbursement Regime

The pharmaceutical pricing regime in Pakistan is typical of an emerging market and far below

international standards. Both generic drugs and patented products are subject to price controls. The

maximum retail price (MRP) of a medicine is determined using a formula that incorporates

manufacturing costs and retail markups. When pricing imported medicines, the cost of freight is also

included.



Medicine prices are then referenced against equivalents in South Asian Association for Regional Co-

operation (SAARC) countries. If there is no counterpart in these countries, international prices –

especially those in Australia and New Zealand – are evaluated. Manufacturers can negotiate MRPs with

the Pricing Committee of the Drug Control Organisation, Ministry of Health (DCOMOH). Locally-

manufactured products for export or WHO distribution are exempt from price controls. Generic drugs are

priced at no more than 70% of the innovator brand.

Drugmakers occasionally increase prices unilaterally due to the poor enforcement of regulations. Critics

say this punishes those on low incomes and impairs healthcare outcomes. Manufacturers say they are

responding to hikes in the cost of raw materials, fuel, electricity and depreciation of the rupee.

In Pakistan’s public sector, medicines are procured through large-scale tenders and prices are set very low

to facilitate access to healthcare. Centralised and decentralised tenders are run by the government. Free

medicines are available for the treatment of thalassaemia, hepatitis, HIV/AIDS and certain cancers.

However, in practice, limited volumes of zero-cost pharmaceuticals are distributed in the country.

Government employees receive free medicines under public sector healthcare plans.

New pricing regime legislation was unveiled in late December 2009. The draft drug pricing policy seeks

to increase access to medicines for the aforementioned chronic diseases by imposing more price controls

and a degree of free pricing, which BMI believes will be welcomed by pharmaceutical companies.

Those medicines with an MRP below threshold levels will be entitled to a 10% price rise each year.

Threshold limits will be re-examined when government employees receive pay reviews. The most recent

review, in June 2009, saw the state increase wages by 20%. However, the rise was deemed insufficient in

the wake of high inflation.

The cost of medical care in Pakistan has increased over the past two years; however, in relative terms, it

has become more affordable during that period. Using a baseline of 2000/01 = 100, the Statistics Division

of the Government of Pakistan reveals that the consumer price index (CPI) for ‘medicare’ has risen from

130.05 in December 2007 to 153.91 in November 2009 – a jump of 18.3%. Meanwhile, the ‘general

goods’ CPI rose from 154.77 to 212.02 – an increase of 40.0%. It is BMI’s view that moderate growth of

the ‘medicare’ CPI is most likely due to price controls, despite their poor enforcement.

Pakistan has an Essential Drugs List (NEDL), but it includes patented products that are too expensive for

the vast majority of the 181mn population. It is mandated that all government and semi-government

health institutions conduct bulk procurement in accordance with the NEDL. However, there is poor

adherence to this list in actual provincial or district procurement practices.

An essential drugs list that contains only generic drugs was first proposed by the government of Zulfikar

Ali Bhutto in the late 1970s. However, following the July 1977 coup d’état led by General Muhammad

Zia-ul-Haq, the plan was shelved. Benazir Bhutto, assassinated in December 2007, was a strong supporter



of the policy and would have implemented it had she won the general election scheduled for early 2008.

Approximately 150 countries around the world have essential drugs lists, most of which are modelled on

a catalogue published by the WHO. The WHO list contains a core list (basic medicines) and a

complementary list (specialty pharmaceuticals).

In May 2008, due to an erosion of margins, pharmaceutical companies called on Pakistan’s government to

allow them to increase the price of medicines by 10%. The firms complained that the price of drugs had

remained stable for the previous five years, while the cost of production had risen by one fifth over the

same period, resulting in drugmakers posting ever-decreasing margins on sales.

However, the price controls are expected to remain in place for the medium term, primarily because of the

widespread problem of expired medicines being sold. This will put pressure on all stakeholders, but local

firms are likely to suffer more than the multinationals. Nevertheless, any gaps that may appear in the

market are expected to be filled in by operators from a lower cost base country, such as neighbouring

India.

Around the same time, the authorities announced the creation of a new scheme for dispensing essential

medicines free of charge from government hospitals. The drugs had previously been distributed by the

humanitarian Bait-Ul-Maal scheme but allegations of a misappropriation of funds have led to stricter

controls. BMI welcomed the move but pointed out that only a very small percentage of the country’s vast

population will benefit.

Bait-Ul-Maal seeks to provide medical treatment, educational resources and rehabilitation to the most

marginalised members of the population, such as orphans, the disabled, widows, students and the very

poor. Funds are provided by the state and then allocated by non-governmental organisations (NGOs). It

had been known that the system lacked transparency but it was not until a case of gross nepotism – when

20 members of an extended family had received Bait-Ul-Maal funds – that the Ministry of Health

demanded a revision of the system.

Under the new plan, special medicine counters have been placed in state-run hospitals. Those eligible can

then receive their prescribed pharmaceuticals without the involvement of NGOs, which frequently have

agendas in addition to helping those in need (such as the promotion of religious beliefs). However, since

1993, only US$20mn has been dispersed by Bait-Ul-Maal for medical treatment, which does not bode

particularly well for the success of the new scheme.

The very poor – termed ‘hardcore poor’ – also benefited from a plan introduced in March 2008 that

provided health insurance free of charge. Under the scheme, a policy holder’s family would receive

PKR15,000 (US$216) if the insured died in an accident, or PKR7,500 (US$108) for other causes of death.

PKR1,000 (US$14) would also be provided for funeral costs.



During January 2009, Pakistani pharmaceutical firms were afraid of losing their domestic market share to

international companies after a law fixing the same prices for identical medicines was abolished.

Previously, prices of medicines manufactured by multinationals were set much higher than identical drugs

produced by domestic companies. Now the rates of lifesaving drugs are linked to the CPI.

It was revealed in February 2009 that medicines manufacturers in Pakistan had increased some prices by

up to 200%, which was highly criticised by many stakeholders. The government had approved increasing

the prices of nearly 350 molecules by 10-40% in January 2009, following lobbying by both domestic and

foreign pharmaceutical industry.

For example, GlaxoSmithKline (GSK)’s Augmentin (amoxicillin + clavulanate potassium) tablets was

priced at PRK74 (US$0.90), up by some 18% on the previous price. However, a number of drugs had

already been withdrawn from the market, such as GSK’s Ventolin (salbutamol) inhaler, due to their lack

of financial viability.

Table: The Formulae For Pharmaceutical Pricing In Pakistan

Imported medicines All formulations Maximum retail price = manufacturing costs + freight expenses

+ 40% markup

Locally-manufactured drugs Non-sterile products Maximum retail price = manufacturing costs + 75% markup

Sterile products Maximum retail price = manufacturing costs + 90% markup

Source: Drug Control Organisation, Ministry of Health (DCOMOH)



Industry Trends And Developments

Epidemiology

BMI’s BoDD reveals that number of

DALYs lost to communicable diseases –

such as tuberculosis and measles – in

Pakistan during 2009 was 19,369,492.

This is significantly more than the

number of DALYs lost to non-

communicable diseases (15,255,144).

However, as the country’s economy

grows and life expectancy increase, this

situation will reverse.

Pakistan’s health indicators are generally

poor, particularly in rural areas. About a

fifth of the population is malnourished –

a higher rate than the 17% average for developing countries – and 30% of children under the age of five

are malnourished. About 30,000 women die from pregnancy-related causes each year, as 80% of births

take place at home with unskilled or no birth attendants. However, demonstrating the commitment to

improving rural conditions, the minister for industries, production and special initiatives revealed in June

2007 that Basic Health Units (BHUs) – the first tier of health service delivery – were being revamped.

Leading causes of sickness and death include gastroenteritis, respiratory infections, congenital

abnormalities, tuberculosis (the incidence of which is 181 per 100,000), malaria and typhoid fever. Poor

air quality has led to a 5% annual increase in the number of asthma cases, with some 12% of all adults in

the country already affected. Additionally, polio has not yet been eradicated in the country, with the

government presently trying to resume vaccinations after they signed a 2008 peace deal with the militants

in the Swat Valley.

In terms of other leading causes of morbidity, thalassaemia is through to affect some 80,000 already. By

2019, Pakistan is likely to register around 200,000 patients, which will require PKR4bn in treatment

costs. Diabetes is also a rising problem, especially as 8% of diabetics develop additional complications,

namely foot ulcers. Currently, there are between seven and eight million diabetics in Pakistan, with the

number expected to double by 2025.

Non-Communicable Diseases

It is estimated that 18% of the Pakistani population older than 15, or approximately 12mn people, are

suffering from hypertension. Around 5% of children also suffer from this lethal disease, due to the

Burden Of Disease Projection

2005-2030

0

5

1015

20

25

30

35

40

2005

2010

f

2015

f

2020

f

2025

f

2030

f

Mill

ion

sDALYs lost to communicable diseasesDALYs lost to non-communicable diseases

f = forecast. DALYs = disability-adjusted life years. Source: BMI’s Burden of Disease Database (BoDD).



consumption of poor-quality food. Mortality due to hypertension-related diseases is on the rise in

developing countries like Pakistan and around 65-70% of the global cardiovascular and cerebrovascular

mortality takes place in the developing world. Similarly, an official from Dow University of Health

Sciences (DUHS) recently expressed concern over the lack of awareness and knowledge about heart

disease and means of preventing it in Pakistan. It was pointed that cardiovascular disorders caused over

50% of adult deaths and 30% of all deaths in Pakistan.

The main reasons for the above situation are a lack of diagnosis and a shortage of effective treatments

such as lipid-lowering treatments. However, with the patents on a number of best-selling statins set to

expire in the coming years, this situation may be improved by the emergence of generic equivalents. The

Pakistan Hypertension League is planning to hold a number of screenings throughout the country to help

identify high blood pressure and cholesterol.

Less than half of the 1mn patients with Parkinson’s disease in Pakistan are being treated presently,

according to the Pakistan Parkinson’s Society. While this may seem a huge sales opportunity, the

potential upside is likely to be minimal, as most sufferers cannot afford the necessary drugs or

occupational therapy. BMI’s BoDD reveals that Parkinson’s disease is a growing problem in Pakistan.

The disease accounted for the loss of 19,579 DALYs in 2007, or 0.05% of the country’s total disease

burden. By 2030, the number of DALYs lost to Parkinson’s disease is forecast to reach 27,537, or 0.067%

of the total disease burden.

Similarly, according to PakTribune, about 1mn people in Pakistan are suffering from Alzheimer’s

disease. The prevalence of the disease is progressing primarily in low- and middle-income countries, with

Pakistan experiencing an exceptional high rate. The disease can be controlled by spreading awareness and

appropriate government allocation of resources for the development of caring systems and other

measures.

Pakistan has one of the highest rates of depression/anxiety in the world, placing a huge strain on its

people. Causes include political insecurity, economic uncertainty and social disparities. Unfortunately, a

lack of trained psychiatrists and poor access to medication means that sufferers are not being treated

effectively. This is resulting in a stunted economy and a considerable human cost. Around 54mn

individuals are classified as depressed or anxious in Pakistan, according to meta-analysis of several

epidemiological studies. This equates to a prevalence of 34%, which is significantly higher that the global

average of 7-18%. As with other countries, many more women than men are affected.

Communicable Diseases

Pakistan is experiencing a growing rate of HIV/AIDS infection. The country is presently classified as low

prevalence but high-risk. The PPMA has repeatedly accused the government of allocating an insufficient

budget to the health sector. The US Agency for International Development (USAID) has launched a

US$2.7mn programme to support the government of Pakistan in its fight against HIV/AIDS. The new



scheme will focus on educating 27,000 high-risk individuals about HIV/AIDS and will provide care and

support for infected individuals. However, efforts to increase HIV/AIDS awareness among the population

are hampered by low literacy levels. Pakistan had nearly 6,000 registered cases of HIV/AIDS in 2009,

with 97,400 estimated cases. This represented a considerable increase compared with the previous year,

when there were 5,000 registered cases and 80,000 estimated cases of the disease.

In order to combat meningitis and pneumonia, Pakistan launched a Hib (pentavalent) vaccine scheme in

July 2008. The preventative agent will be administered free of charge to every newborn child as part of

the Expanded Program on Immunisation – which saw vaccination drives against polio, measles,

diphtheria, pertussis and tetanus in 2007.

Pakistan started the next phase of its national measles vaccination campaign in July 2007, with the aim of

immunising more than 63mn children by March 2008. Each year around 21,000 children die of measles

and associated complications in Pakistan. Moreover, the WHO, in partnership with UNICEF and the

government, completed a three-day vaccination drive against polio in May 2007. More than 34mn

children under the age of five were immunised against the disease (a 97.7% coverage).

The National Tuberculosis Control Programme (NTCP) manager recently stated that the Pakistani

government, under a public-private partnership programme titled ‘Stop TB’ is providing free treatment to

90% of the 0.3mn TB patients recorded in the country. He added that 7,000 TB care centres are being

established for the implementation of the programme.

According to a survey published by the Pakistan Medical Research Council (PMRC) in January 2010, the

prevalence of hepatitis B stands at 2.5% while that of hepatitis C is 4.9%. Huma Qureshi, executive

director at PMRC, stated that re-use of syringes and administration of unnecessary injections are the two

principal causes for the spread of hepatitis B and C.

Recent Public Health Developments

Pakistan is committed to making its population healthier, as evidenced by the continuing strong support

for the Social Action Programme (SAP) and by the new vision for health, nutrition and population

outlined in the government’s National Health Policy Guidelines (up to 2010). An example of a promising

recent initiative is the Lady Health Worker (LHW) community-based programme, which is bringing

health information, some basic healthcare and family planning services to women’s doorsteps. At

presently, some 3,000 women are serving as LHWs in their home villages. In March 2009, the

government also announced that Pakistan is aiming to eradicate tuberculosis from the country by 2015,

with the help of some 5,000 active TB centres.

In an attempt to increase access to healthcare among the rural poor, the country’s first ever mobile

mammogram clinic was launched in February 2009. The clinic is a joint venture between the Pink Ribbon



National Breast Cancer Awareness Campaign (Pakistan) and the Institute of Nuclear Medicine and

Oncology (INMOL) from the Pakistan Atomic Energy Commission.

As Pakistan has the highest rate of breast cancer in Asia. In October 2009, Pakistan’s Ministry of Health

was considering restarting the National Breast Cancer Screening Project, as part of a breast cancer

awareness campaign in the country. The project, which started in 2006, was stopped due to a lack of

political will, despite the availability of funds. Previously, the ministry failed to implement the project

due to the absence of an experienced programme manager to run the campaign.

Pakistan is also due to install its first disease monitoring system. The sophisticated software allows

disparate incidences of disease outbreaks to be collated centrally, enabling appropriate action to be taken.

The monitoring system was developed by US firm DiagnosisONE and will initially focus on hepatitis,

which holds eighth place on the top 10 list of priority diseases in Pakistan. Incidences of the liver disease

will be recorded at source and then aggregated by the national authorities, in order to use evidence-based

decisions for determining the best treatment options.

Healthcare System

The healthcare system mostly comprises public providers, with hospitals being the key point of access to

healthcare services, although out-of-pocket payments are widespread. Wealthier urban areas boast a

number of private clinics, although these are out of reach for the majority of the low-income population

due to their prohibitively high costs.

Infections are rife in government hospitals, with up to 70% of all deaths in such institutions thought to be

caused by unnecessary infections. The rate is estimated at 15% in private hospitals, which is still

excessive. Some of the infections are caused by the use of unsafe injections. In order to control the

administration of unsafe injections, the country needs to restrict the relatively common practice of

patients receiving unnecessary injections. In Pakistan, the average injection rate stands at 8.5 injections

per person per year.

Civil conflict and natural disasters have resulted in the displacement of a vast number of people, pushing

the country’s healthcare system to its limits. At present, around 423,000 people in Pakistan need urgent

healthcare, according to the WHO. While the government plans a 56% increase in its healthcare budget

for 2010, it stands at under US$150mn at present, which is considered vastly inadequate. The WHO has

therefore announced a package of US$5.50mn as part of the Pakistan Humanitarian Response Plan, while

its health partners need a combined US$4.26mn for vital activities.

Nevertheless, the government has been making efforts to improve primary care, although the vast rural

areas of the country are making the progress more difficult. Among other international agencies, the

United States Agency for International Development (USAID) has been working with local authorities to

strengthen the Pakistani healthcare provision. Additionally, the government has confirmed its



commitment to necessary action against the lack of appropriate preventive treatments in the country. The

flourishing ‘quackery’ system includes treatment with used syringes, un-screened blood transfusions and

contaminated medical equipment, all of which are contributing to exacerbating the spread of hepatitis in

the country.

However, efforts to improve healthcare are likely to be derailed by the rapid population increase. The

present situation where women have 3.8 children on average is putting a strain on healthcare facilities,

basic infrastructure and agricultural land. The government, international organisations and BMI all agree

that more education – specifically regarding family planning – is the solution. However, in a country

where religious leaders denounce contraception as a sin and custom encourages large families, lowering

the birth rate will be a challenge.

Table: Pakistan – Key Healthcare Statistics, 2007 (‘000 people, unless otherwise stated)

Population per total beds 1,458.57

Population per hospital 157.51

Population per dispensary 30.89

Rural Population per rural health centre 176.27

Population per TB clinic 525.22

Female Population per M. C. H. Centre 78.08

Population per doctor, total 1,484.29

Population per dentist 30.91

Female population per lady health visitor 11.74

Female population per midwife 3.02

Population per nurse, total 3,561.35

Source: Efroze Pharma, Federal Bureau of Statistics

Pakistan’s prime minister, Yusuf Raza Gilani, is astute enough to realise that two children per woman is

an overly ambitious goal. To mark World Population Day on July 11 2008, he unveiled a plan to reduce

annual population growth from 1.8% to 1.55% over the next five years. Welfare schemes will receive the

necessary budgetary support and an emphasis will be placed on education.

Some foreign agencies are recognising the longer-term potential of the Pakistani healthcare and

pharmaceutical market. In July 2008, Singapore Health Services visited Pakistan to seek partnerships

within the healthcare sector. The visit was aimed at increasing the sharing of knowledge and expertise

between doctors in Pakistan and Singapore Health Services, which operates three public hospitals, five

specialist centres and eight polyclinics in the city state. The Singapore Health Services’ attempt to enter

Pakistan comes against the steady growth of the country’s healthcare market.



Healthcare Insurance

Healthcare is mostly financed by private, out-of-pocket payments. The introduction of a social insurance

programme has been discussed, but no progress has been made to date. Private insurance currently covers

some 800,000 individuals and their dependents, while social security covers 5.65mn.

In October 2009, however, Pakistan was considering implementing a health insurance scheme similar to

India’s insurance scheme for the poor. Islamabad is keen on studying the Rashtriya Swasthya Bima

Yojana, which provides insurance cover for below poverty line (BPL) families. The scheme has been

implemented by the Centre, state and insurance companies in 18 states across India.

Further evolution of the healthcare insurance sector was seen in November 2009, when the Aga Khan

Agency for Microfinance (AKAM) established a healthcare insurance service in Pakistan. The First

Microinsurance Agency (FMiA) offers three products in conjunction with an education programme. Due

to improved access to healthcare, there will be some commercial upside for private hospitals and

manufacturers of affordable generic drugs.

FMiA is targeting poor families that struggle to pay for medical services. Because this target market is

generally uneducated, the agency intends to spend a significant amount of time explaining its products –

hospitalisation insurance, savings completion and credit life.

Hospitalisation insurance provides cashless coverage for medical expenses in private healthcare facilities,

with a focus on chronic diseases, obstetric care and accidents. Savings completion guarantees that a

family’s savings objectives are met even in the event of the death or injury of the main wage earner.

Meanwhile, credit life helps to protect the family of a loan borrower from debt in case of death or serious

disability.

Medical Tourism

Pakistan is looking to become a medical tourism hub. The government wants to attract foreign patients to

the country, encourage the private sector to administer advanced treatments and ensure relaxing

surroundings for recovery. It is hoped that people seeking healthcare in Pakistan will drive the overall

tourism market, resulting in increased national wealth.

However, BMI believes the probability of Pakistan achieving this goal is extremely low. Despite recent

setbacks to Islamist militancy in the country, such as the death of the leader of the Taliban in Pakistan in

August 2009, the spectre of terrorism looms large. At this time, Pakistan cannot compete with relatively

low-risk destinations. In the Asia Pacific region, the leading medical tourism sites are Thailand, India,

Singapore and South Korea.



Affordability is perhaps the one feature of Pakistan’s healthcare system that lends itself to medical

tourism. Many surgical procedures can be performed for a tenth of the price found in Western countries.

Luxury and mid-range hotels are relatively cheap, although these have been terrorist targets in the past. In

June 2009, suicide attackers killed at least 11 and injured as many as 70 people at the Peshawar Pearl

Continental Hotel.

Pakistan’s quest to become a medical tourism destination will also be restricted by questionable ethics. In

mid-2009, the country’s Supreme Court expressed concern that the sale of human organs for

transplantation was still taking place despite a 2007 law prohibiting the practice. Prior to the legislation, it

was estimated that as many 1,500 foreigners were visiting Pakistan annually to receive kidneys from live

donors.

Traditional Medicine

Limited access to healthcare facilities, conservative and low-income populations, and social barriers are

among some of the factors that have traditionally promoted the use of non-Western medicines. In

addition, the private sector is generally under-regulated. It consists of few accredited outlets and hospitals,

and has a number of healers, homeopaths and other practitioners. In particular, the Greco-Arab system of

medicine (Unani) has been especially important in rural and tribal areas of the country, leading to its

official integration into the national health system.

Currently, estimates indicate that there are some 45,000 traditional healers in Pakistan, around 75% of

which work in rural areas. An additional 52,600 unregistered Unani medical practitioners are also

practicing in the country. A number of unregistered pharmacies are supplying various herbal and other

medicines to the population.

In terms of herbal medicines, Pakistan is ranked among the top eight global exporters. Some 300

pharmacies in the country are engaged in the manufacture of homeopathic medicines, while the export of

such goods (mostly to Bangladesh, Malaysia, Singapore and some African countries) is estimated at

around PKR10mn. However, the sector has been underutilised, due to the misallocation of resources and

the lack of communication between departments.

One of the more prominent players in the herbal medicines field is Herbion. The company, incorporated

in 1983, is engaged in the development of herbal products and their clinical testing. Its plant complies

with GMP standards, with products presently exclusively marketed in the Commonwealth of Independent

States (CIS). The company is reportedly planning to target the US and Western European countries in the

future.

The situation is likely to improve over the coming years as Pakistan recognises the potential of the sector.

Moreover, China’s Herbal Medicines Research Institute has agreed to assist Pakistan in research in the

development of traditional medicines. To this end, the two countries are considering setting up a joint



research institute. In the meantime, the government is also considering a traditional medicine bill to

regulate the sale, storage, import and export of such products.

Retail Sector

As with many developing countries, Pakistan’s retail sector is still evolving. A significant recent

development was the introduction of the Punjab Drug Sale Rules 2007. The Pakistan Pharmacists

Association endorsed the changes, which discriminated between pharmacies and ‘medical stores’.

However, owners of medical stores were against the development.

Under the recently announced scheme, special medicine counters in government hospitals will be in

charge of dispensing essential medicines free of charge. The drugs had previously been distributed by the

humanitarian Bait-Ul-Maal scheme, which has been disgraced by allegations of misappropriation.

The Pakistan Chemists Retailers Association (PCRA) categorically opposed pharmaceutical companies’

demand to raise drug prices in November 2008, calling it ‘ruthless cruelty to be meted out to the poor

patients’. It also demanded the establishment of a commission to review all previous rises in drug prices

allowed by the government.

Research And Development

Local companies are mostly engaged in the manufacture of generics, with few operating their own R&D

facilities of any note. However, India and Pakistan are increasing their efforts to promote biotechnology

as part of the wider efforts of the newly created Federation of Asian Biotech Associations (FABA). The

association was launched in 2005 by member countries including India, Pakistan, Malaysia, Thailand,

Singapore, Philippines and Sri Lanka. Israel, Iran and Saudi Arabia have since joined the group, and

Japan, Korea, Taiwan, and Bangladesh are also likely candidates for membership.

The clinical trials situation is undesirable from a multinational perspective, as most studies (largely phase

IV) are more promotional than evaluative. The majority of trials are uncontrolled and open label, and

mostly designed with a view to improving market shares rather than truly testing a product. Other

limitations of the clinical trials environment include poor healthcare facilities and the lack of private

insurance, as well as patchy government coverage.

In February 2009, local drugmaker Ferozsons Laboratories announced that work had started on its new

US$10mn biotech facility, which is being developed in partnership with the Argentine drugmaker

Laboratorios Bagó, which will produce drugs to treat hepatitis and cancer. The new factory, which will

meet US FDA regulatory standards, should help Ferozsons to establish a significant export base in the

coming years and provide products for Pakistani patients. Meanwhile, the company is planning a number

of launches in the coming months in the areas of gastroenterology, oncology and transplantation, and is

calling for the government to overhaul the regulatory system – in order to promote accelerated drug

registrations for local companies. Ferozsons, like many local manufacturers, would also like prices to be



deregulated in therapeutic areas where there is a sufficient diversity of products to ensure free-market

competition.

International Cooperation

Pakistan has been instrumental in establishing closer ties with neighbours as its macroeconomic climate

improves. Growth has been impressive, inflation has been kept in check and the country has a viable

balance of payments. Market mechanisms are much more transparent and confidence in the private sector

is the highest for years. Expatriate Pakistanis are bringing capital back home and the country’s credit

rating in international capital markets has improved. Moreover, foreign exchange reserves, which were

only US$2bn at the turn of the century, have now exceeded US$11bn. This places Pakistan as an

emerging economic player in the region.

In March 2005, Pakistani officials put forward the possibility of greater cooperation with the Bangladeshi

sector, in light of India’s adoption of a new WTO-compliant patent regime. The two countries are set to

sign a memorandum of understanding (MoU) on the issue, thereby committing to maximising

opportunities ahead of Bangladesh’s scheduled implementation of TRIPS patent legislation in 2016. Any

new arrangements may also benefit Pakistani drug exporters, as production in the country is understood to

be significantly cheaper than in Bangladesh.

Pakistani pharmaceutical companies have recently demanded a level playing field with regard to trade

with Bangladesh. Pakistan has allowed dozens of Bangladeshi drugs onto the market, while Bangladesh –

despite repeated promises – has yet to register a single Pakistani drug. As a result, Pakistan has now

stopped registering Bangladeshi drugs with the Federal Health Ministry.

Demand for Bangladeshi drugs is rising in Pakistan because of their low cost. The Bangladeshi

pharmaceutical sector is booming, with output expanding by 15-20% over the last couple of years due to

the recent patent waiver by the WTO for less developed countries. Unfortunately, Pakistan – which is

already concerned about competition from Indian, Chinese and South Korean imports – is suffering as

Bangladesh dumps its low-cost products on the market.

In March 2007, Uzbekistan and Pakistan agreed to establish private sector joint ventures in

pharmaceuticals, medical devices and healthcare technology, as well as partnerships in other industries.

BMI welcomes this development as both countries have different strengths and a pooling of resources

will ultimately result in better healthcare outcomes for both sets of citizens. To facilitate joint healthcare

projects, Pakistan is tendering engineering goods, sporting equipment and textiles. Uzbekistan,

meanwhile, is offering cotton fibre, silk, mineral fertilisers, cables, construction materials, agriculture

machinery, chemicals and aircraft.

During November 2007, a delegation of Pakistani pharmaceutical manufacturers travelled to Rwanda to

investigate investment possibilities. Initially medicines will be exported directly but in the mid-term,



technology will be transferred and production facilities will be built. This is important because according

to Common Market for Eastern and Southern Africa (COMESA) rules, if the products are not composed

of 35% raw materials, they will not benefit from free movement within the trade bloc.

As part of a plan to increase bilateral trade, Pakistan called upon Indian pharmaceutical companies in

September 2007 to use its country as a conduit to the populous but frequently impoverished Islamic

markets. While the offer represented another sign of improving relations between the neighbouring

countries, BMI believes it will not amount to much, as India – with an equivalent-sized Muslim

population – is in a similar, if not better position to export medicines to countries like Saudi Arabia and

Nigeria (which both rely heavily on imports).

In September 2008, according to Kashmir Media Service, Indian and multinational pharmaceutical

companies were warned that action will be taken by the Pharma Associates of Jammu if companies are

found to be supplying medicines directly to the valley of occupied Kashmir. The secretary of Pharma

Associates of Jammu issued a memo to all pharmaceutical companies stating that there will be no

cooperation from his organisation as well as the rest of India if companies attempt to disturb the existing

distribution system in the occupied territory.

Following a breakdown in relations during 2007, there were growing signs in early 2008 that Pakistan and

China were patching up their once close ties. Two Chinese drugmakers are looking to establish joint

ventures in the South Asian country, while Pakistan has invited China to participate in a gas pipeline

originating in Iran. BMI believes that Sino-Pakistani trade should boom as a result, from the current

estimated US$7.5bn a year to US$15bn by 2012. Chinese Shetang Zhong Industry and China Liu

Enterprises wish to sell their products in Pakistan in partnership with local firms. Their intentions are

being welcomed because the Pakistani pharmaceutical market is characterised by multinational

drugmakers and their expensive patented products. The Chinese companies are confident that they can

offer generic medicines at much lower prices than anyone else, even low-cost India.

Medical Devices

The medical devices industry and market in Pakistan are indicative of the wider state of the country’s

development. While the demand for new and modern equipment exists, it is not supported by healthcare

financing and logistics. Consequently, the medical devices market is negligible in global terms, hampered

by ill-equipped public hospitals and an underdeveloped primary care network. While the private sector

exists in more affluent urban areas, it is very small.

Medical devices are regulated by the MoH, which imposes no restrictions on imports. There are no

specific registration requirements, provided the goods are properly authorised in their country of origin.

In 1997, duties for medical devices were reduced, encouraging imports. Duties on items that can be

locally produced (such as bandages), however, are much higher. This is in order to provide some

protection to the local industry.



In the future, the prevalence of communicable diseases will continue to drive demand for sterilisation and

similar equipment, although the lack of finances for rural services – where such diseases are most

widespread – will hamper sector development. In the meantime, most hi-tech devices will continue to be

imported, although a small and fragmented domestic industry (centred on the Punjabi town of Sialkot)

will remain responsible for the manufacture of a range of quality devices – which are increasingly

exported. Some of the local companies active in the medical devices market include distributors, such as

Electromed Corporation, Hospital Supply Corporation and Fazael Din and Sons.



Industry Forecast Scenario

Pharmaceutical Market Forecast

Combined sales of prescription drugs and

over-the-counter (OTC) medicines in

Pakistan are forecast to increase from

PKR132bn (US$1.62bn) in 2009 to

PKR144bn (US$1.64bn) in 2010. Due to

the weakening rupee, this equates to

growth of 9.1% in local currency terms

and 1.2% in US dollar terms.

A key driver of medicine consumption is

economic development. According to

BMI's Country Risk team, Pakistan's

GDP is forecast to post real growth of

2.4% in 2010. Although this figure is

above the 2.0% recorded in 2009, it is well below the 2003-08 average of 6.3%.

Inflation is major problem in Pakistan. The consumer price index (CPI) – which BMI uses as a proxy for

inflation – increased from 7.8% in 2007 to 11.7% in 2008, and then to 21.0% in 2009. Due to ongoing

and anticipated government controls, the CPI is forecast to average 12.6% in 2010, 11.0% in 2011 and

8.4% in 2012.

Pakistan's large, growing and ageing population is an obvious enticement to pharmaceutical companies.

According to the UN Population Division, the number of people living in the country will increase from

148mn in 2000 to 226mn in 2020 – a rise of 53%. The percentage of the population aged 65 and over will

increase from 3.7% to 4.6% over the same period. However, we caution that per-capita spending on

medicine in Pakistan is, and will remain, relatively low (US$9 in 2009, US$10 in 2014 and US$11 in

2019).

BMI does not expect many foreign firms to enter Pakistan's pharmaceutical market over the medium

term. Aside from the precarious political situation, the rupee is projected to weaken further over the next

five years. Our Country Risk team expects the US$:PKR exchange rate to deteriorate from 1:88 in 2010

to 1:110 in 2014.

This means prospects for local players are much more promising than those for companies that repatriate

revenues. BMI's pharmaceutical expenditure forecast model reveals that medicine sales will increase

from PKR132bn (US$1.62bn) in 2009 to PKR196bn (US$1.78bn) in 2014. This equates to compound

Pharmaceutical Market Forecast

2005-2019

0.0

0.5

1.0

1.5

2.0

2.5

2005

2006

2007

2008

2009

2010

f

2011

f

2012

f

2013

f

2014

f

2015

f

2016

f

2017

f

2018

f

2019

f

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Drug expenditure (US$bn), LHS

Drug expenditure as % of GDP, RHS

f = forecast. Source: IMS Health Asia, Pakistan Pharmaceutical Manufacturers Association (PPMA), BMI. For data, see Forecast Tables section below.



annual growth rates (CAGRs) of 8.25% in local currency terms and 1.96% in US dollar terms. By 2019,

we expect the pharmaceutical market to reach a value of PKR290bn (US$2.12bn).



Key Growth Factors – Industry

Healthcare spending in Pakistan is

expected to increase from PKR226.5bn

(US$2.77bn) in 2009 to PKR257bn

(US$2.92bn) in 2010. Due to

depreciation of the rupee, this equates to

growth of 5.2% in US dollar terms and

13.4% in local currency. Spending on

healthcare as a percentage of GDP is

1.73%, well below both the regional

(5.12%) and global (7.14%) averages.

Because such a low percentage of

national wealth is directed towards

medical services, healthcare outcomes are

very poor. The burden of both

communicable and non-communicable disease is high. Many children die from preventable conditions.

There is a chronic shortage of healthcare professionals, especially nurses and doctors. Worryingly, this

situation is not expected to improve significantly over the medium term. By 2014, BMI forecasts

healthcare spending as a percent of GDP to reach 2.01%.

Per-capita healthcare spending was a paltry US$17 in 2009. The majority was out-of-pocket expenditure

because there is no comprehensive health insurance scheme and the government has minimal involvement

in the sector. In 2009, public sector healthcare spending reached US$440mn, which equated to 15.9% of

the total market. The regional and global averages for this indicator are 47.5% and 59.5% respectively.

The low average spend on healthcare is not completely representative of reality. According to the WHO,

per-capita healthcare spending in Pakistan reached US$50 during 2007. This expenditure was expressed

at the international dollar rate, which is a hypothetical unit of currency that has the same purchasing

power of the US dollar in the US at a given point in time.

The prospects for Pakistan’s healthcare sector are bleak. Due to political instability, foreign stakeholders

are reluctant to invest in Pakistan. The traditional medicine sector is popular, especially in rural areas.

Private clinics are limited to those on high incomes in urban areas. A rapidly expanding population is also

disguising high mortality rates in all age groups. Through to 2014, we are projecting a CAGR of 13.65%

for healthcare spending in Pakistan.

Healthcare Expenditure Forecast

2005-2014

f = forecast. Source: World Health Organization (WHO), BMI. For data, see Forecast Tables section below.



Key Growth Factors – Macroeconomic

Insurgency to Hold Back Economy

While Pakistan managed to come through the global financial crisis and its own currency collapse to

register 2.0% growth in FY2008/09 (July-June), we do not see much to smile about. Indeed, the economy

is performing well below potential – a situation we expect to continue as the country continues to be

plagued by a woeful security environment, political instability, low investment spending and relatively

tight monetary and fiscal conditions. We forecast real GDP growth to come in at a disappointing 2.4% in

FY2009/10 and 2.2% in FY2010/11.

Pakistan’s economy has experienced severe turbulence during 2008 and 2009 owing to its ongoing

internal political strife in conjunction with the global financial crisis. While Pakistan’s militant

insurgency has depressed economic activity and deterred investment spending (which contributed -1.2

percentage points [pp] to real GDP growth in FY2008/09), the external financial crisis catalysed a balance

of payments crisis, in turn requiring an IMF bailout and countercyclical monetary and fiscal tightening.

Although real GDP growth did still come in positive at 2.0% in FY2008/09, Pakistan is effectively in a

zero growth environment since population growth is ticking along at around 1.8%.

Considering recent data releases from the State Bank of Pakistan (SBP), we do not see much to suggest

this situation will change anytime soon. Industrial activity within Pakistan remains relatively depressed.

Pakistan's index of large scale manufacturing industries rose 5.0% y-o-y in October, or 7.1% m-o-m,

sharply below the expansionary rates seen in the years prior to 2007. More concerning for Pakistan's

economic outlook is the overall length of time it has taken for Pakistan to register a significant gain in this

index. While it is understandable that production may have taken a hit in late 2008/early 2009 as the

global economy tanked, the fact that large-scale industrial output struggled to turn positive for so long,

while many other emerging market economies (especially in Asia) were powering back, is clearly

disappointing. Over the coming months we expect Pakistan's large scale manufacturing index to remain in

positive territory but believe that a return to the brisk rate of output growth seen in previous years is

extremely unlikely.

Indeed, Pakistan’s economy will continue to struggle while facing a militant insurgency. Added to this we

see external factors once again conspiring against the Pakistani economy. Throughout the financial crisis,

Pakistan's economy has enjoyed some level of support from a surge (up 62.7% y-o-y in October) in

remittance payments from Pakistanis working abroad. Remittances, which account for around 5% of

Pakistan's GDP, will come under pressure in coming months. Over half of Pakistan's remittances come

from the US, the UK, Saudi Arabia and the UAE. We expect all four of these economies to perform

relatively poorly in 2010, thereby limiting the scope for further upside in remittance flows. Indeed, with

the UAE contributing around 25% of total remittances, Pakistan has a considerable exposure to the slump

in Dubai's property market and construction industry – a major employer of Pakistani nationals.



Given our expectations that the surge in remittances seen in FY2008/09 cannot be sustained and the dire

domestic security situation, we believe that private consumption will contribute less to real GDP growth

over the next few years. While private consumption contributed 3.7pp to real GDP growth in FY2008/09,

we forecast a contribution of only 1.1pp and 1.4pp in FY2009/10 and FY2010/11 respectively.

Added to a relatively weak consumption outlook we also expect investment spending to remain

depressed, primarily thanks to Pakistan’s poor security situation and shaky political outlook. With

President Asif Ali Zardari facing calls to stand down and terrorist attacks showing no sign of abating,

Pakistan provides a far from conducive investment climate. Indeed, as previously mentioned, falling

investment has already acted as a major drag on economic growth. We see no reason for a sharp

turnaround in investment sentiment in the coming months. Indicative of continued depressed investment

spending is the stalling of private sector loan advances by Pakistani banks in 2009, which grew by a

meagre 0.4%, from PKR3,141,028mn to PKR3,154,737mn, in January-October. We therefore forecast

that investment will contribute only 0.2pp to real GDP growth in both FY2009/10 and FY2010/11 – a

situation far from ideal in a country plagued by weak infrastructure and regular power shortages.

At the same time, with government spending restrained by IMF loan provisions, economic growth will

not be driven by increased fiscal expenditure. Instead we forecast government spending to contribute

0.0pp and -0.3pp to real GDP growth in FY2009/10 and FY2010/11. Therefore, economic growth will

almost entirely rest on increased private consumption and a pick up in external demand in line with the

global economic recovery (we forecast net exports to contribute 0.9pp to real GDP growth in both

FY2009/10 and FY2010/11). With Pakistan's population growing at around 1.8% per annum, the paltry

2.4% and 2.2% growth in real GDP that we forecast in FY2009/10 and FY2010/11 respectively is far

from ideal. Indeed, we expect US dollar incomes in Pakistan to remain fairly flat over the next few years,

increasing from US$973 per capita at end FY2008/09 to US$1,083 by end FY2013/14. Compared with its

Asian peers, such economic performance is extremely weak and, in our view, could serve to perpetuate

the militant insurgency with which Pakistan is currently grappling.

Risks to Outlook

While our outlook for the Pakistani economy is largely pessimistic, we nevertheless see risks skewed to

the downside. Indeed, with Pakistan’s energy bill comprising almost half of all imports in FY2008/09, the

country is vulnerable to any sharp energy price rises. A rapidly increasing import bill could further

depress headline growth and could once again spell danger for the Pakistani rupee.

Furthermore, growth could be curtailed if Pakistan's militant insurgency were to escalate and increasingly

spread into core regions such as the Punjab. While Pakistan's military has gained ground from the

Pakistani Taliban in both the Swat Valley and South Waziristan, December 28's suicide bombing in

Karachi, which killed 43 and resulted in rioting, showed that militants possess the ability to reach beyond

their core provinces and into Pakistan's commercial heart. Also, the sectarian nature of the attack (made

on minority Shiites) does not bode well for Pakistan, politically or economically. While our forecasts



account for a volatile political situation, any significant escalation would put downward pressure on our

low growth forecasts.

Pakistan – Economic Activity

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Nominal GDP, PKRbn 1,2 6,499.8 7,623.2 8,673.0 10,284.4 13,095.0 14,880.2 16,321.8 17,754.1 19,440.9 21,520.2

Nominal GDP, US$bn 1,2 109.1 126.6 141.8 146.2 159.6 165.3 171.8 176.7 184.3 195.2

Real GDP growth, % change y-o-y 1,2 9.0 5.8 6.8 4.1 2.0 2.4 2.2 2.7 3.6 3.7

GDP per capita, US$ 1,2 715 814 897 909 973 989 1,009 1,018 1,042 1,083

Population, mn 3 152.5 155.4 158.2 160.9 163.7 166.6 169.6 172.7 175.8 178.9

e/f = estimate/forecast. Notes: 1 Fiscal years ending June 30 (2008=2007/08); Sources: 2 Ministry of Finance/BMI. 3 Federal Bureau of Statistics



Prescription Drug Market Forecast

The boundary between prescription and

non-prescription segments is blurred by

the fact that many prescription medicines

are dispensed freely over the counter.

Nevertheless, the prescription drugs

market will remain the dominant part of

the overall market over the coming years.

In 2009, the prescription market was

worth PKR106bn (US$1.29bn),

accounting for 80.3% of the total. The

segment is forecast to reach PKR157.7bn

(US$1.43bn) in 2014, growing at a

CAGR of 8.25% in local currency terms,

just above that for the overall market.

Drugs for the treatment of infectious disease require much attention, given the country’s level of

development. However, authorities are seeking to reduce over-prescribing and overuse of prescription

drugs in general and antibiotics specifically. On the other hand, for example, Pakistan also has around

1mn Alzheimer’s patients, indicating a significant potential for the use of chronic and long-term

therapies.

Strength of prescription drug sales should continue, as hospitals and doctors continue to be the primary

access point to healthcare and as access to medical services and pharmaceuticals improves over time.

However, counterfeit drugs are likely to continue to have a damaging impact on sales. Industry observers

are calling for much stronger government action in this area, including closer monitoring of the supply

chain and greater investment in educating consumers.

A major factor affecting value growth is also the government’s continuing control over pharmaceutical

prices. Such intransigence has been especially damaging to local firms in the light of fluctuations in the

price of raw materials in recent years, although this is mostly applicable to generic products.

Liberalisation of the pricing regime would boost profits and allow greater investment in areas such as

manufacturing and R&D. With Pakistan’s large low-income population already struggling to afford most

medicines, there is unlikely to be any dramatic change in policy in the near future.

Another major problem involves the misuse of prescription pharmaceuticals. Internationally there are

strict rules in place for prescription drugs, with doctors expected to use triplicate prescription forms and

follow stringent procedures that restrict supply after a month. However, such practices are not required in

Pakistan. This has led to abuse of prescription drugs and has caused some serious health problems as a

consequence. Tranquillisers and anti-anxiety drugs are the most targeted drugs and are often purchased

Prescription Drug Market Forecast

2005-2019

0.0

0.5

1.0

1.5

2.0

2005

2006

2007

2008

2009

2010

f

2011

f

2012

f

2013

f

2014

f

2015

f

2016

f

2017

f

2018

f

2019

f

0102030405060708090

Prescription drug market (US$bn), LHS

Prescription drug sales as % of total market, RHS




without a prescription. The lack of correct protocols when prescribing drugs has also made it difficult to

track consumption and demand.



Patented Drug Market Forecast

Despite the strict pricing regime and the

lack of universal reimbursement, the

patented market, which was worth about

PRK37.80bn (US$231mn) in 2009 – at

just under 15% of the total market – is

forecast to reach PRK49.45bn

(US$276mn) at consumer prices in 2014.

The segment will post a CAGR of 6.52%

in local currency terms, stimulated by the

recently introduced fast-track registration

system for drugs on sale in at least two

advanced markets, as well as by the

general improvement in incomes and

healthcare financing.

During Q407, a prominent professor from the Dow University of Health Sciences (DUHS) in Karachi

said that doctors were ‘succumbing to pressures’ from drug-makers – in the form of substantial gifts - to

give out more expensive therapeutics when cheaper alternatives were available. This criticism was backed

up by the Pakistan Medical Association (PMA), which pointed out that the popular painkiller Ponstan

(mefenamic acid) was being sold by a foreign drugmaker for PKR1 (US$0.02) per tablet, while local

firms sell generic versions for a third of that price.

In the meantime, launches of novel drugs by multinationals will remain restricted by the IP regime. Patent

violations are encouraged by the long period (up to two years) it takes to register a drug in Pakistan. The

delay in the introduction of a new essential drugs list will provide a breathing space for many companies

with patented medicines. However, the list will not contain any patented products, with the result being

boosted generics sales.

On the other hand, generic products are not widely prescribed. Medical practitioners are inadequately

aware of the efficacy of generics compared to patented products, largely due to their justly deserved poor

reputation in Pakistan. This is likely to require significant enhancements in product quality in the future,

which may be beyond the financial means of many local companies.

Patented Product Market Forecast

2005-2019

0.0

0.1

0.2

0.3

0.4

0.5

2005

2006

2007

2008

2009

2010

f

2011

f20

12f

2013

f

2014

f20

15f

2016

f20

17f

2018

f20

19f

0

5

10

15

20

Patented product market (US$bn), LHS

Patented product sales as % of total market, RHS




Generic Drug Market Forecast

Generic drugs – or at least copied

products in general – will continue to

play a dominant role in the market,

largely as a result of their low cost and

government support for the sector.

Current rules encourage the registration

of non-bioequivalent copies of original

drugs in Pakistan and packaging rules

require chemical names to be

prominently stated on drug packets. This

implies equivalence despite the limited

grounds for being able to establish it.

The new essential drugs list, which was

due to be published in the course of 2009, and likely to be significantly delayed in the light of the security

priorities, will only contain generic products, eventually boosting the sector’s values and volumes. We

believe that the list will be one of the key drivers of generics market growth through to 2014. Spending on

‘legitimate’ generics was some PKR174.7bn (US$1.07bn) in 2009 and can be expected to rise to

PKR208.4bn (US$1.15bn) at consumer prices by 2014, which translates into a CAGR of 3.39% in local

currency terms. Due to IP improvements to the status of patented drugs and the strong competition in the

generic sectors negatively impacting pricing levels, the share of generic drugs is expected to decline

slightly in the same period, from 66.0% to 63.6%.

The government also requires that the international non-proprietary name of the substance be printed on

pharmaceutical packaging with at least the same prominence as the brand name. Multinational drug

companies claim that this provision undermines trademark rights and gives an unfair advantage to the

local generics sector by encouraging substitution. It also implies complete inter-changeability between the

two different products. This is not always the case, as Pakistan does not demand that generics submit

effective bioequivalence data. As a result, industry association PhRMA claims that this law actually

constitutes a risk to public health, although the Pakistan government maintains that it is essential to

increase access to low-cost drugs.

The monopoly status once held by multinationals over the generics market has been removed by the

emergence of strong domestic manufacturers. The shift in market dynamics has led to a voluntary

reduction in prices, with all institutions of the federal and provincial governments (at primary, secondary

and tertiary levels) now purchasing their drugs in the form of generics.

Generic Drug Market Forecast

2005-2019

0.00.20.40.60.81.01.21.41.6

2005

2006

2007

2008

2009

2010

f

2011

f

2012

f

2013

f

2014

f

2015

f

2016

f

2017

f

2018

f

2019

f

01020304050607080

Generic drug market (US$bn), LHS

Generic drug sales as % of total market, RHS




OTC Medicine Market Forecast

Given that most medicines are freely

available over the counter and that illegal

copies of branded products are widely

available, the growth of the OTC sector

will continue to be stimulated over the

forecast period. The market is expected to

remain buoyed by the fact that a large

proportion of pharmaceutical spending

continues to be financed out-of-pocket

and those that are unable to access

healthcare remain reliant on readily

available over-the-counter remedies.

The OTC healthcare market in Pakistan

was worth PKR26.05bn (US$319mn) in 2009, accounting for 19.7% of the total market. OTC sales are

forecast to increase in the near future to PKR38.72bn (US$363mn) by 2014, posting a CAGR of 8.25% in

local currency terms. Despite losing some share of the total market, the low cost of OTCs and a growing

preference for self-medication and preventative care – supported by a rising number of distribution

channels – will provide the main drivers of future growth.

Efforts to harness the potential of traditional medicines could have a beneficial impact on the OTC

market. According to estimates, more than half the population live in rural areas, with limited or restricted

access to healthcare. Pakistan has a rich tradition in using medicinal plants to treat ailments, with around

70-80% of the population using traditional medicines. The government is keen to exploit this area,

especially in terms of exports, while increased use of herbal supplements could be a key driver of growth

for OTCs. In a related development, the Supreme Court has demanded the introduction of regulations

covering Ayurdevic, Unani and homeopathic treatment systems. However, the MoH is reported not to

have acted on this issue to date.

For the most part, sales of OTCs will be sluggish, restricted by weak consumer spending power,

especially in rural areas. In urban areas, OTCs will witness increased sales, as changing lifestyle patterns

and longer working hours result in more people self-medicating. Sales of paediatric OTC drugs are likely

to grow faster than adult counterparts, as the country’s birth rate remains high.

Regulations covering OTCs can be lax, as evidenced by the availability of more than 60 brands of

different benzodiazepines without a prescription. The problem is that all benzodiazepines have an

addictive potential. Use of benzodiazepines should commence only after medical consultation and should

be prescribed in the smallest dosage possible to provide an acceptable level of symptom relief.

OTC Medicine Market Forecast

2005-2019

0.0

0.1

0.2

0.3

0.4

0.5

2005

2006

2007

2008

2009

2010

f

2011

f

2012

f

2013

f

2014

f

2015

f

2016

f

2017

f

2018

f

2019

f

0

5

10

15

20

25

OTC medic ine market (US$bn), LHS

OTC medic ine sales as % of total market, RHS




Pharmaceutical Trade Forecast

Despite intense competition from

neighbouring India, Pakistan is looking to

increase pharmaceutical exports to other

emerging markets. Initially, the country

hopes to target the promising regions of

Central Asia and Africa, but it is BMI’s

view that Pakistan is ultimately hoping to

sell its medicines in the high margin

markets of Western Europe and the US,

although ensuring high quality will be

key to such efforts. Presently, main

export destinations are Central and

South-East Asia and Africa.

According to the Islamabad Chamber of

Commerce and Industry (ICCI), exports can only be increased significantly once the majority of Pakistani

manufacturers upgrade their facilities so that they meet international standards (such as GMP).

Nevertheless, in 2008, Pakistan’s export rose by 10% y-o-y, as reported by the Pakistan Pharmaceutical

Manufacturers Association (PPMA). The Association singled out better quality and improved marketing

as key reasons for this increase.

In order to achieve the expensive GMP criterion, the trade groups, also including the Pakistan Industrial

and Traders Associations Front (PIAF), have been urging the government to lower tariffs on the import of

pharmaceutical equipment to zero and to establish better support system for pharmaceutical exporters.

Moreover, the ICCI wants greater investment in R&D, which will increase the quality and scope of

product offerings. Indeed, some tariffs – such as import duties on raw materials – have been reduced

recently.

In 2009, BMI calculated that pharmaceutical exports from Pakistan totalled just US$84.6mn. However,

the potential for the sector is immense. The PPMA believes that medicines with a value exceeding

US$600mn could be exported by 2010. We are much more cautious, forecasting US$168.6mn in

pharmaceutical exports in 2014.

Pakistan is vociferous in proclaiming its potential as a mass medicine manufacturer. For over 10 years, it

has sought to increase its capabilities in this area by encouraging foreign investment, fostering local firms

and touting its products to neighbouring states. For example, in March 2007, Uzbekistan and Pakistan

agreed to establish private sector joint ventures in pharmaceuticals, medical devices and healthcare

technology, as well as partnerships in other industries. BMI welcomed the development as both countries

Pharmaceutical Trade Forecast (US$mn)

2005-2014

-700-600-500-400-300-200-1000100200300

2005

2006

2007

2008

2009

f

2010

f

2011

f

2012

f

2013

f

2014

f

Exports Imports Balance

f = forecast. Source: United Nations Comtrade Database, DESA/UNSD, BMI. Note: HS2002 - 3004 classification. For data, see Forecast Tables section below.



have different strengths and we knew a pooling of resources would ultimately result in better healthcare

outcomes for both sets of citizens.

To upgrade medicine production lines, Pakistan has imported blister units, tablets and capsule machinery

from South Korea, China and Germany. This equipment will allow drugs to be formulated to international

standards, thereby boosting the sales of drugs to overseas markets. Moreover, the government is looking

to provide incentives to exporters by sharing the cost of registering drugs in foreign markets.

Imports can be expected to climb gradually, as the local industry remains dependent on imported raw

materials and as the results of modernisation slowly take effect. The government’s recent approval of

duty-free imported drugs from India – with the aim of providing a cheaper alternative to the soaring cost

of pharmaceutical products in Pakistan – should also serve to increase the level of imports in the short

term. However, under pressure from the local industry, in July 2008 the government banned imports of

400 drugs from India, illustrating its strong bias towards domestic producers. Import licences of a further

4,000 products were revoked in October 2009, under pressure from the local industry.

During early 2008, rotating energy blackouts were limiting pharmaceutical production to domestic

consumption and the ongoing political turmoil was putting off global buyers. Hydroelectricity represents

one third of Pakistan’s energy supply and droughts during Q108 severely impaired output. This forced the

authorities to introduce ‘load shedding’ or periodic blackouts. The phenomenon is part of daily life in

many African countries, due to a combination of aging electricity generation infrastructures and the

inadequacy of electricity supply in meeting ever-expanding demand. However, in Pakistan it is usually

restricted to summer months and even then only occurring frequently in rural areas.



Other Healthcare Data Forecasts

Following partition in 1947, Pakistan’s population of approximately 35mn was the 14th largest in the

world. Having surpassed Japan, Bangladesh and Russia (among others) it is now the sixth largest – after

China, India, the US, Indonesia and Brazil. Meanwhile, Pakistan is only the 34th largest country in terms

of land area, while the country holds 136th place on the Human Development Index. The UN’s Economic

and Social Development agency estimates that Pakistan’s population will reach a staggering 292mn by

2050.

Public healthcare resources are generally inadequate in Pakistan. Successive governments have attempted

to introduce private elements into the provision of healthcare – a process that has benefited a wealthy

minority. Given its largely rural population, the distribution of resources is patchy, with the country

suffering from a lack of trained medical personnel, as illustrated by the low and stagnating number of

doctors.

The country has an average of only one doctor per 1,310 people, below the recommended ratio of

1:1,000. The nurse-to-patient ratio is an even poorer, at 1:4,636. Dentistry is also very under-subscribed at

only 1:25,297 and the profession has been accused of perpetuating the HIV/AIDS epidemic through the

use of unsanitary tools. Around 80% of all babies born in the country are delivered at home, with the

country suffering around 100 deaths per 1,000 live births. Pakistan is one of the few countries where

people are asked to pay a post-mortem fee.

Nevertheless, Pakistan is committed to the goal of making its population healthier, as evidenced by the

continuing strong support for the SAP and by the new vision for health, nutrition and population outlined

in the government’s National Health Policy Guidelines up to 2010. An example of a promising recent

initiative is the LHW community-based programme, which is bringing health information, some basic

healthcare and family planning services to women’s doorsteps.

The role of non-governmental organisations (NGOs) cannot be underestimated, especially for the work

they do in impoverished communities. Numerous parallel healthcare systems exist, including those run by

the army, the provincial, federal and local governments, the Water and Power Development Authority

(WAPDA), Pakistan International Airways (PIA), the Atomic Energy Commission, social security

organisations, and the private sector.



Key Risks To BMI’s Forecast Scenario

Although current prospects for the Pakistani pharmaceutical sector are not overly optimistic, any

acceleration in the process of modernisation of the healthcare sector could alter this outlook markedly.

The implementation of real reform cannot be totally ruled out, given the current impetus behind regional

harmonisation in Asia and the government’s improving attitude to its international obligations. Any

success in bringing the domestic sector into line with international norms could bring greater external

investment; in turn quickening the pace of modernisation and increasing spending levels.

Corruption and red tape will continue to hamper improvements in the overall business climate in the

country. Politically speaking, as well, Pakistan remains a risk in terms of investment. The health system

in the northern tribal regions close to Afghanistan has suffered from underinvestment, which is related to

difficulties the government is experiencing in maintaining control. For example, in early 2009, the WTO

reported that Taliban militants were preventing 300,000 children from getting polio vaccinations in

Northern Pakistan, which they link to infertility.

Pharmaceutical products in Pakistan are relatively costly, but retailing is among the most profitable

businesses in the country. Pharmaceuticals are vital commodities for middle-class households. However,

given that patients remain responsible for the full cost of pharmaceuticals dispensed in the public sector,

economic fluctuations and variations in consumer purchasing power will have a direct impact on drug

market revenues and volumes – as will the government’s focus on necessary cost containment. In

addition, exports could be harmed by high inflation, which would lead to an appreciation of the real

exchange rate, resulting in exports becoming less competitive and imports becoming relatively cheaper.



Competitive Landscape

Pharmaceutical Sector

According to market research firm IMS Health, the top 50 companies (30 multinationals and 20

domestic) enjoyed an 83.5% market share in mid-2000s, while the top 100 had 94% of the Pakistani

pharmaceutical market. Despite the significant presence of multinationals in Pakistan as well as the

country’s market potential, the leading international firms’ local activity remains minimal, largely

because of unfavourable operating conditions.

As of Q108, there were a total of 664 pharmaceutical concerns in Pakistan, of which 405 are registered

manufacturing units, including 31 multinationals. A year later, the number of registered pharmaceutical

concerns topped 4,400, which the government is hoping will lead to price competition, to the benefit of

consumers. Retail sales account for more than 80% of the market, with healthcare institutions responsible

for the remainder. Only 5% of local production is exported, although regional trade development is likely

to boost this figure in the coming years.

Data from the Karachi Stock Exchange reveals that there are eight listed pharmaceutical companies in

Pakistan. The majority are subsidiaries of foreign multinationals, with local representatives Ferozsons

Laboratories and Highnoon Laboratories. In the 2008 financial year, combined sales and profits after

tax reached US$393mn and US$35mn respectively. The total of the assets of the eight firms was

US$309mn.

2008 Financial Snapshot Of Pakistani Drugmakers Listed On The Karachi Stock Exchange (US$mn)

Financial year end

Total assets Sales

Profit before tax

Profit after tax

Abbott Laboratories Pakistan Ltd November 59.2 83.7 6.4 4.1

Sanofi-Aventis Pakistan Ltd December 35.2 51.3 1.0 0.5

Ferozsons Laboratories Ltd June 17.5 11.0 3.5 2.6

GlaxoSmithKline Pakistan Ltd December 125.5 158.2 35.4 23.1

Highnoon Laboratories Ltd December 17.4 22.8 0.9 0.7

Otsuka Pakistan Ltd June 9.7 12.5 1.2 0.8

Searle Pakistan Ltd June 27.1 24.6 2.5 1.7

Wyeth Pakistan Ltd December 17.8 28.1 2.7 1.7

Totals 309.4 392.3 53.6 35.1

Source: Karachi Stock Exchange



Domestic Pharmaceutical Industry

Local manufacturers are able to compete to a large degree with the strongly positioned multinational

sector, due to their ability to market copies of branded, patent-protected drugs. Although the cause of

much frustration for the multinational sector, the situation is likely to persist for some time as the

government aims to protect the local industry. Despite being on the agenda for the past few years, the

modernisation of the regulatory system in Pakistan – particularly patent legislation – remains slow. Based

on the reform programmes of other emerging markets, patent legislation is likely to be one of the last

areas to be reformed.

Additionally, problems persist regarding the quality of some production units and their adherence to

legislation. For example, reports in December 2008 revealed that only a fifth of drug-makers in Lahore

were destroying their waste – such as expired medicines and toxic raw materials – in incinerators, thus

infringing the Hospital Waste Management Rules (HWMR).

Nevertheless, the government has highlighted the pharmaceuticals sector as a key growth opportunity in

the wake of India’s new patent laws and other regional modernisation initiatives. However, strict

government pricing controls have resulted in many uneconomic drugs being available only on the black

market at inflated prices, or disappearing completely.

Pakistan’s pharmaceutical sector is fairly evenly divided between domestically-produced generic drugs

and imported branded prescription pharmaceuticals. According to the PPMA’s figures, the domestic

industry is responsible for an estimated 70-85% of the total market in terms of volume and some 55% in

terms of value – although the 2006 figures have since shifted further in favour of domestic production.

More than 100 local companies are represented by the umbrella Pakistan Pharmaceutical Manufacturers

Association (PPMA), with multinationals organised by the Pharma Bureau. In March 2009, the president

of the PPMA, Zahid Saeed, claimed that the local pharmaceutical industry spent PKR107bn (US$1.3bn)

on manufacturing facilities, which he equated to a saving of about US$3bn in foreign exchange on the

import of medicines.

The local industry remains vulnerable to imports, due to its relatively poor technical capacity, the lack of

financial resources and the reliance on raw materials sourced from abroad. Multinationals and foreign

companies dominate the market in terms of value, but suffer patchy and difficult market penetration. This

is due to the exclusive use of generics in the public sector, low patient purchasing power and restrictive

pricing and IP policies.

Foreign Pharmaceutical Industry

The leading 10 suppliers of finished drugs in Pakistan are multinationals. Some operating conditions are

more advantageous to foreign firms than similar conditions offered in Pakistan’s regional peers. For



example, drugmakers can establish operations that are 100% backed by foreign funds and profits can be

repatriated without permission.

Nevertheless, the foreign drug industry continues to blame slow sector development on strict government

pricing controls and the poor state of the regulatory infrastructure. However, a number of recent

regulatory improvements – such as allowing foreign patent holders to pursue legal action against local

infringements – have led to better treatment for multinationals. In 2002, Merck & Co and GSK were

successful in the defence of patents for Fosamax (alendronate) and Seroxat (paroxetine) respectively.

However, inconsistencies remain, with GSK losing its case against Werrick Pharmaceuticals regarding

Avandia (rosiglitazone) in the same year. This example illustrates that proper enforcement is still lacking.

Nevertheless, the US drug manufacturer Schering-Plough opened commercial operations in Pakistan in

July 2005. The move forms part of the firm’s long-term strategy to expand its business in the Asia Pacific

region. The new company, Schering-Plough Pakistan, has its headquarters in Islamabad. The company

will assume responsibility for Peg-Intron (peginterferon alfa 2b) and Clarinase (loratadine +

pseudoephedrine), which were previously handled by local distributor ICI Pakistan (an affiliate of the

British company).

Recent Pharmaceutical Sector Developments

Given the contemporary political and economic difficulties, in October 2008, the former President of the

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) called on the government to ban

imports of goods that are not deemed necessary for survival, which would improve the balance of

payment. In July 2008, the government blocked the proposal to import around 400 drugs from India.

Local drugmakers protested against the proposal by the commerce ministry, saying that over 1mn jobs

would be affected by the plan and over US$120mn worth of annual exports threatened. More recently,

Pakistan’s Federal Health Ministry cancelled the registration of 4,000 imported medicines, for the same

reason.

The July 2008 development follows the recent criticism of the country’s wholesalers and distributors by

Pakistani retailers, which objected to the alleged blocking of imports of cheap drugs from India. This

supported their claim with the fact that no new import licences for Indian-sourced pharmaceuticals were

granted in 2005. Distributors and wholesalers had disputed the assertion by stating that many Indian drugs

reach Pakistan via third countries, although the trend has had little downward impact on prices. In the

meantime, Indian drugs are failing to penetrate Pakistan through legal routes, despite the introduction of

zero tariffs on such imports in June 2005 – implemented as a response to distributors’ refusal to reduce

margins.

In June 2009, the government allowed the local pharmaceutical industry to import raw materials and APIs

at concessionary rates of duty. Custom duties have been slashed from 25 and 10% to 5%, which covers

imports of 19 types of APIs (including aspirin, amlodipine, loratadine and lamivudine), chemicals and



raw materials. The industry has welcomed the move, as it will now be able to import the goods at reduced

prices. Customs duty on four types of diagnostic kits (breast cancer, blood cancer, cervical cancer and

vitrol) has also been lowered from 20 to 5%, with duty on import of stents and a number of other items

removed completely.

The current government hopes to build on previous reforms targeting increased foreign investment and

has attempted to reassure investors of its intention to maintain a consistent pro-investment policy.

However, a series of investment promotion agencies – most recently the Pakistan Investment Board and

its successor, the Board of Investment (BOI) – have lacked the necessary authority and continuity of

leadership. Additionally, risks to foreign direct investment (FDI) exist, most prominent being the weak IP

and increasing inflationary trends without consequent increases in the prices of drugs.

In September 2009, Pakistan’s ambition to become a significant exporter of pharmaceuticals came under

threat, after a Ugandan drugmaker sued a Pakistani pharmaceutical manufacturer for supplying

substandard goods. Mavid Pharmaceuticals had filed a lawsuit against Royal Group for breach of

contract, following the purchase of raw materials for a therapeutic ointment, Samodex. However, after

testing by the National Drug Authority (NDA), these goods turned out to be ‘fake’. Mavid

Pharmaceuticals initially sought to recoup its US$68,000 outlay, but Royal Group ‘just ignored the

demand’. In the course of 2008, the NDA already withdrew from the market sub-standard tetracycline and

indomethacin capsules made by Royal Group. In December 2009, Sulaiman Bukenya, director of Mavid,

stated that his company was ready to seek an out-of-court settlement as Royal Group intended to liquidate

its business.



Company Monitor

Indigenous Manufacturers

Searle Pakistan

Strengths Partnerships with several multinational drugmakers.

Manufacturing plants have GMP accreditation.

Exports to under-penetrated frontier markets

Weaknesses A limited product portfolio.

No presence in high-value biologicals.

Domestic sales underperforming compared with export revenue.

Opportunities Leveraging the well-known Searle brand.

Exporting more products to unregulated markets.

Producing vaccines or biosimilars

Threats Strong competition from Indian generic drug firms.

Larger domestic rivals.

A worsening operating environment.

Company Overview Searle Pakistan was incorporated in 1965 as a subsidiary of US-based G.D. Searle & Co, which

is best known as the developer of Enovid (mestranol + norethynodrel) – the first oral

contraceptive pill. In 1993, the parent company divested its interests in Searle Pakistan as part

of its global downsizing policy. Later that year, Searle Pakistan was made a public limited

company and shares of the firm began trading on the Karachi Stock Exchange (KSE).

Searle Pakistan has modern manufacturing plants in Karachi and Lahore, both following Good

Manufacturing Practice (GMP) regulations. The company has partnerships with several foreign

drugmakers, including Grunenthal, Forest Laboratories, 3M, Orion Pharma, Lisapharma, Sanofi-

Aventis and Menarini.

According to primary market research firm IMS Health, Searle Pakistan is the 11th largest

drugmaker in Pakistan based on sales and held a 2.4% market share at the end of 2008. The

company exports to Vietnam, Myanmar, Bangladesh, Sri Lanka, Afghanistan, Kyrgyzstan,

Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan, Azerbaijan, Kenya and Uganda.

Financial Performance For the 12 months to June 20 2009, Searle Pakistan recorded sales of PKR2.71bn

(US$32.3mn), a 30% increase compared with the period a year earlier. Meanwhile, profits after

tax almost doubled to PKR258mn (US$3.5mn). The company described the financial results as

'very strong' despite the global downturn, high prices of active pharmaceutical ingredients

(APIs), increased cost of fuel and utilities, domestic inflation and devaluation of the rupee.



In the first six months of fiscal 2009/10, Searle Pakistan recorded sales of PKR1.67bn

(US$19.9mn) compared with PKR1.25bn (US$14.9mn) in the period of the previous financial

year. Domestic revenue increased by 30.3%, from PKR1.15bn (US$13.7mn) to PKR1.50bn

(US$17.9mn). Meanwhile, foreign sales rose by 34.9% to PKR128,000 (US$1.5mn).

Company Address Searle Pakistan Limited, 1st Floor N.I.C. Building,

Abbasi Shaheed Road , Karachi, Pakistan

Phone: +92 21 3567-4321

Fax: +92 21 3568-7693

Email: [email protected]

Website: http://www.searlepak.com



Hilton Pharma

Strengths A leading local drug manufacturer.

Internationally standardised production facilities.

Affiliation with a number of foreign companies.

Weaknesses Reliance on foreign-sourced raw materials.

Strong competition from multinationals in the branded sector.

Existence of substantial counterfeit trade.

Opportunities Positive economic performance and rising patient purchasing power.

Government and international encouragement for drug exports.

Regional harmonisation and trade agreements.

New essential drugs list to only include generics.

Import duties on a number of APIs and raw materials recently slashed.

Threats Need to align local regulatory and IP with international standards.

Negative impact of high inflation and rising production costs on the company’s bottom

line, given the government’s resistance to increase drug prices.

Volatile political and economic climate.

Strong regional competition in the field of generics.

Depreciation of local currency making imports of raw materials more difficult.

Company Overview Hilton Pharma, the leading pharmaceutical manufacturer in Pakistan, is based in Karachi’s

Korangi Industrial Area. The company’s facilities, which comply with international production

standards, are responsible for the manufacture of human and veterinary medicines.

The company is affiliated to a variety of international firms, including Alpharma, Serono,

Kunming Pharmaceutical Corp, Daiichi, Elan, Fresenius Kabi Austria GmbH, Novartis, and

Takeda.

Recent Developments It was revealed in October 2008 that Hilton would merge with Sami Pharmaceuticals. The deal is

significant because it is the first time that two local companies ranked in the top ten have

merged. Reliable information on Sami Pharmaceuticals is difficult to obtain but the firm

generated annual revenues exceeding PKR2bn (US$25mn).

Company Address Hilton Pharma Pvt Ltd

8th & 9th Floor Progressive Plaza Beaumont Road

Karachi , Pakistan

Tel: +92 21 111 123 000

Fax: +92 21 111 124 000

www.hiltonpharma.com



Efroze Chemical Industries

Strengths One of the leading local drug manufacturers.

Considerable demand for cheap generic medicines in the country.

International certification of production facilities.

Foreign partnerships, especially in relation to R&D activities.








Import duties on a number of APIs and raw materials slashed recently.

Threats Need to align local regulatory and IP laws with international standards.


Negative impact of high inflation and rising production costs on the company’s bottom line, given the government’s resistance to increase drug prices.



Company Overview Efroze Chemical Industries, a leading domestic pharmaceutical manufacturer, was established

in Karachi in 1968. Its second factory was opened in 1999, with both facilities receiving

international certification shortly after. The company’s field staff consists of around 150

personnel, with employees totalling 375 people. Sales are estimated at US$10mn a year.

Efroze is involved in R&D activities (in the field of pharmacokinetics and bioavailability in

cooperation with partners including Aga Khan University, PCSIR, Karachi University and JPMC.

Efroze’s international partners include Boryung, Shin Poong (Korea), Italfarmaco (Italy) and

Maple Pharmaceuticals (Canada) and it operates a JV with Japanese Otsuka.

Product Portfolio The company is involved in the promotion of over 50 branded products belonging to different

therapeutic classes through its own distribution network. Its export operations, which started in

1992, now supply over 20 developing markets in Africa, the Middle East, Asia and the former

USSR (Uzbekistan, Kyrgyzstan, Kazakhstan, the Russian Federation, Ukraine and Belarus).

The company’s therapeutic focuses are cardiac care, diabetology, gastroenterology,

gynaecology and pain management, with Efroze also looking to expand into nutraceuticals.

Since the start of 2009, a number of new products have been launched, including Tramapar – a

combination of paracetamol and tramadol – and Montef (montelukast sodium), a treatment for

allergic rhinobronchitis. The Montef tablet is available in a number of strengths.

Company Address Efroze Chemical Industries Pvt Ltd 12, C Block-6, P.E.C.H.S., Off. Sharah-e-Faisal 75400 Karachi, Pakistan

Tel: +92 21 111 337 337 Fax: +92 21 454 5266

www.efroze.com



Ferozsons Laboratories

Strengths One of the largest domestic pharmaceutical companies in Pakistan, with annual sales of around US$14mn.

PKR300mn (US$4.98mn) joint venture (JV) with Argentina’s Bagó Group should help boost both domestic and export businesses.

The new facility will specialise in cancer and hepatitis treatments and aims to make Pakistan self-sufficient in hepatitis drugs.

Ferozsons will be able to leverage Bagó’s global marketing network in order to develop sales overseas.

Weaknesses The company faces tough competition from multinational drugmakers, with large resources and strong sales networks.

Strict labour laws and a corporate income tax rate of 35%.

Company is still in need of a freer regulatory environment and greater support for local industry.

Opportunities New essential drugs list to only include generics.


Positive economic performance would result in an increase in spending power.

Local firms will benefit if authorities introduce accelerated drug registrations for domestic players and deregulate pricing.

Threats Significant counterfeit drug industry will remain a threat to sales.


Negative impact of high inflation and rising production costs on the company’s bottom line, given the government’s resistance to increase drug prices.


Need to align local regulatory and IP laws with international standards.

Company Overview Ferozsons Laboratories was established in 1954 and was the first local pharmaceutical

company to be listed on Pakistan’s stock exchange. The company began as a producer of fine

chemicals and herbal remedies, although it has also signed contract manufacturing agreements

with companies such as the UK’s Boots, and more recently, US major Procter & Gamble.

Ferozsons’ manufacturing facilities are located in Nowshera, Pakistan, and are ISO 9001

certified.

Ferozsons’ collaboration with Bagó Group (Argentina) has been further strengthened by the

establishment of a biotech JV between the two firms – BF Biosciences. Construction of facilities

to house the JV in Lahore was completed by the middle of 2007. The plant, which will specialise

in hepatitis and cancer products, was being designed to meet EU and US FDA regulatory

standards. It should help the company to develop a significant export base in the coming years.

Product Portfolio Ferozsons’ core strengths lie in branded generics with a product portfolio including anti-infective,

gastrointestinal, cardiovascular and dermatological treatments. The company’s marketing team

comprises 230 representatives and managers and covers all of Pakistan. Ferozsons exports its

products to the Middle East, Africa and Central Asia. Packaging for these drugs is available only

in English – or in some instances, Russian.

In the course of FY08/09, the company launched four new products, which are well-supported

by marketing campaigns. The products in question are Aurora (rosuvastatin), for the treatment of



high cholesterol, Orion (olmesartan), for the treatment of primary hypertension, hepatitis B drug

Centaurus (entecavir), and the functional dyspepsia treatment Dynetic (itopride).

Financial Performance Net sales totalled US$15.2mn for the FY07. The company’s revenue increased by 23% – almost

double overall market growth. In 2006, the company posted US$14.1mn in sales and US$2.9mn

in profit.

For the financial year ending June 2008, net sales were PRK932mn (US$15.4mn), up from

PRK922mn the previous year. Gross profit rose by 6.7% y-o-y to PKR541mn, with profit after tax

up by 8.5% y-o-y.

For nine months to March 2009, net sales rose to PKR790mn, up from for PRK692mn achieved

in the same period of 2008. The depreciation of local currency resulted in higher costs to the

company and therefore lower profits in the first nine months of 2009.

For the financial year ending June 2009, net sales were PRK1.085bn. Gross profit rose by 8%

y-o-y to PKR584mn, with profit after tax was down to PRK183mn, due to the local currency

depreciation and higher marketing costs. Pharmaceutical sales accounted for 67% of the total.

Company Data Sales (2008): PKR1.085bn (US$17.3mn)

Sales (2007): PKR932bn (US$15.2mn)

Leading Products Xavor (cardiovascular)

Omega (proton pump inhibitor)

Xolox (antiviral)

Amezole (anti-amoebic)

Proflox (antibacterial)

Novapressin (haemostatic)

Company Address Ferozsons Laboratories, 197-A the Mall 46000 Rawalpindi,Pakistan

Tel: +92 51 556 2155

Fax: +92 51 558 4195

www.ferozsons-labs.com



Getz Pharma

Strengths One of the fasted growing pharmaceutical companies in Pakistan.

International presence in other frontier markets.

Major sales and marketing department in Pakistan.







New essential list to only contain generic products.




Negative impact of high inflation and rising production costs on the company’s bottom line, given the government’s resistance to increasing drug prices.



Company Overview Getz Pharma was established in Pakistan in 1995 and has grown rapidly, expanding into

Vietnam (1999), Sri Lanka (2002) and the Philippines (2005). It now employs more than 1,500

people, and is headquartered in Dubai (UAE).

According to IMS Health, Getz was the sixth largest drugmaker in Pakistan in 2006, having

achieved average growth of 70% a year over the last five years. It has set itself the target of

becoming the second largest drugmaker in Pakistan by 2010.

Its GMP and WHO compliant manufacturing plant in Pakistan handles solid and liquid oral

dosage forms (tablets, capsules, syrups, suspensions and dry powder), and injections (sterile

liquid vials, sterile liquid ampoules, sterile dry powders and sterile lyophilized powders).

Getz Pharma is part of Getz Brothers Group of Companies, which distributes consumer

products, pharmaceutical products and medical devices in 23 countries. Getz has links with

Muller & Phipps, the largest distribution company in Pakistan. It also has the capacity to carry

out contract manufacturing for drug development and commercial manufacturing.

Product Portfolio Getz is focused on the branded generics market, with strengths in haepatology,

gastroenterology, diabetology, cardiology and infertility. It currently markets around 60 products,

including the hypertension drug Lopicard (amlodipine besilate), broad spectrum anti-infective

Ribazole (ribavirin) and the anti-coagulant Norplat (clopidogrel). Its portfolio also includes an

ARV Tenofo-B (tenofovir disproxil fumarate), which is prescribed in combination with at least two

other ARVs for the management of HIV-infected adults, but is also used as a hepatitis B

treatment.

Regional Operations In addition to its international operations in Vietnam, Sri Lanka and the Philippines, Getz has

partnered with a number of international companies, including Sicor Biotech in Switzerland,



Lemery in Mexico, Sicor in Lithuania, SciClone Pharma in the USA, Tillotts Pharma AG in

Switzerland, E-Pharma in Italy, Jewim Pharmaceutical in China and Biocon in India.

Company Address Getz Pharma – Plant Operations 29-30/27, Korangi Industrial Area, Karachi 74900, Pakistan

Tel: +9221 111 111 511

Fax: +9221 506 0141

www.getzpharma.com



Pacific Pharmaceuticals

Strengths One of the leading local drug manufacturers.

Only local producer with EU GMP certification.

Government protection of the local drug manufacturing industry.

Foreign partnerships, especially in relation to R&D activities.





Epidemiology-driven increased demand for medicines.








Negative impact of high inflation and rising production costs on the company’s bottom line, given the government’s resistance to increasing drug prices.



Company Overview Pacific Pharmaceuticals, established in 1990, is the only local producer with EU GMP

certification. The company has manufacturing agreements with six foreign producers, namely

US Marion Merrell Dow (USA), Recordati Industria Chimicae Farmaceutica and Ravizza

Farmaceutici (Italy), Mucos Pharma (Germany), WK Buckley (Canada) and Applied Pharma

Research (Switzerland). Pacific Pharmaceuticals employs over 500 staff. The company is

committed to the development of new and innovative drugs for the treatment of TB and similar

diseases.

Product Portfolio Pacific Pharmaceuticals has 120 registered products, in the form of tablets, capsules, syrups,

and ointments. It is active in a number of therapeutic areas, including antibiotics, antifungals,

cardiovascular, psychotropics, antispasmodics and digestive enzymes. The company also

produces consumer care products, such as mouthwash and cough syrups.

Recently launched products include heart medicine Valvozid (bisoprolol), reflux remedy Plasil

(metoclopramide) and dyspepsia drug Plasenzym (metoclopramide with bromelain, pancreatin

and sodium dehydrochloate) in tablet form, as well as Olbetam (acipimox) capsules for

hyperlipidaemia. The company’s key R&D focus is antivirals, with two advanced compounds

(viramidine and remofovir) already progressing into clinical development.

Regional Operations Pacific Pharma exports to a number of foreign markets, with a focus on emerging Asian and

African countries: Kenya, Tanzania, Uganda, Sudan, Nigeria, Saudi Arabia, UAE, Vietnam, Sri

Lanka, Bangladesh, Hong Kong, Philippines, Uzbekistan, Kazakhstan and Azerbaijan.



Company Address Pacific Pharmaceuticals, 30th Km, Multan Road Lahore, Pakistan

Tel: +92 42 7540 4913

Fax: + 92 42 754 1354

www.pacificpharmaceuticals.com



Leading Multinational Manufacturers

GlaxoSmithKline (GSK)

Strengths The largest pharmaceutical company in Pakistan, double the size of its nearest competitor Abbott Laboratories.

Top three pharmaceutical products in terms of sales are GSK medicines.

Hold over 50% of both the public and private vaccines sectors.

Weaknesses Strong competition from low-cost generic equivalents, both legal and counterfeit.

Lack of reforms in government regulatory policy.

Strict labour laws and high corporate income tax rate.

Opportunities Pakistan recognised as one of the fastest growing economies in the world.

Economic growth resulting in an increase in consumer spending power.

Continued need for vaccine supplies benefits GSK, which has a substantial vaccines portfolio.

Sector modernisation initiatives.

Threats Weak intellectual property laws and a lack of their implementation.

Rising numbers of generics, which is a major barrier to multinational investment.

Increasing inflationary trends without consequent increases in the prices of drugs

Significant counterfeit drug industry.

Persistently high inflation in Pakistan negatively impacting financial performance, given the government’s resistance to increase drug prices.

Rising costs of raw and packaging materials having an adverse effect on the company’s bottom line.


Company Overview GlaxoSmithKline Pakistan was formed in 2002, as result of the global merger of the two

pharmaceutical giants, GlaxoWellcome and SmithKline Beecham. The local company, a merged

SmithKline and French, Beecham Pakistan and GlaxoWellcome Pakistan, is 79% owned by the

UK drug major.

GSK is the largest pharmaceutical company in Pakistan, with a growing export business to

Afghanistan. GSK Pakistan is headquartered in Karachi and employs 1,800 people. According to

its own 2008 annual report, GSK holds 11.39% of the market by value, 18.33% by volume, and

13.11% of the prescription market.

GSK is looking to increase research investment in diseases that affect the region. This will include

the resolution of challenges such as drug resistance and poor patient compliance. The work

undertaken focuses on malaria, tuberculosis, HIV/AIDS and vaccines, allowing GSK to address

the prevention and treatment of all three of the WHO’s top priority diseases. As a result, GSK is

currently examining conditions with regards to a major investment in R&D facilities in Asia – a

move that could add impetus to sales growth in the short term. In addition, the company has

made clear its interest in maximising its potential within the HIV/AIDS therapeutic segment.

Recent Activities In October 2008, Pakistan’s Daily Times quoted ‘well-informed sources’ within Pakistan’s

pharmaceutical industry that had seen confidential papers circulated by Bristol-Myers Squibb

stating that the company was seeking a buyer for its local operations. It was revealed in

December 2008 that GSK had bought BMS Pakistan for US$36.5mn.



In December 2005, GSK joined the relief effort in Pakistan by donating 350,000 doses of

paediatric hepatitis A vaccine, Havrix Junior. The drug was used in relief camps in order to help

prevent the spread of disease and was part of a global relief operation undertaken by many

international organisations and companies.

GSK has recently reported promising progress on the development of a bird flu vaccine. In trials,

GSK’s potential vaccine stimulated a protective response in 80% of those who received it.

However, substantial further work is still needed, including testing the efficacy of the product

against mutated strains of the virus.

The biological division of GSK announced in March 2007 that it was spending PKR700mn

(US$11.5mn) on expanding its existing four manufacturing plants in Pakistan. Demonstrating the

significance of GSK’s announcement, the Pakistan Board of Investment estimates that foreign

pharmaceutical firms invested US$42mn in the country during 2006. Vaccines will be produced

for the domestic market, as well as for export to neighbouring countries.

Product Portfolio GSK’s primary activities are the manufacture, import and marketing of research-based

pharmaceutical (prescription drugs) and consumer healthcare products (OTC medicines, oral care

and nutritional care). Principal therapeutic areas include antibiotics and respiratory,

dermatological, gastro-intestinal and metabolic products. They also include analgesics, central

nervous system (CNS) products and vaccines. Leading products include Augmentin and Amoxil,

the sales of which reached PKR2bn (US$23.6mn) and PKR1bn (US$11.8mn) in 2008,

respectively. Betnovate was its leading brand by volume.

In Pakistan, GSK is looking to expand vaccine sales against the major killer diseases such as

hepatitis B, typhoid and rotavirus. GSK is also the preferred partner of Infant Immunisation

Programs worldwide supported by the Global Alliance for Vaccines and Immunization (GAVI),

WHO and the Pan-American Health Organisation (PAHO).

Meanwhile, the company’s performance will be boosted by the introduction of Seretide

(salmeterol + fluticasone propionate), a novel treatment for effective asthma control. In the course

of 2007, GSK Pakistan launched rotavirus vaccine Rotarix, a prostate treatment Avodart

(dutasteride), and Aerolin (salbutamol) for asthma. In 2008, new products included the anti-

thrombotic Arixtra (fondaparinux) and the vaccine Infanrix (diphtheria toxoid).

Financial Performance In 2007, GSK Pakistan posted PKR10.6bn in turnover, with profit reaching some PKR2.7mn. Its

product Augmentin (co-amoxiciclav) was the best-seller in terms of value, while Betnovate topical

steroid cream (betamethasone valerate and clioquinol) was the top-seller in the country with

regards to volume. Its paracetamol, Panadol, was the best-selling prescription medicine.

The abovementioned products continued to perform well into 2008, occupying the same positions.

Overall GSK Pakistan sales for 2008 topped PKR13.4bn (US$158mn), with profit before tax

reaching PKR3bn (US$35.4mn).

Company Data Sales (2008): US$213mn

Sales (2007): US$175mn


Leading Products Amoxil (amoxicillin)

Ampiclox (ampicillin + cloxacillin)



Augmentin (amoxicillin clavulanate)

Betnovate (betamethasone valerate)

Calpol (paracetamol)

Panadol (paracetamol)

Septran (sulfamethoxazole)

Seretide (salmeterol + fluticasone propionate)

Ventolin (salbutamol)

Zantac (ranitidine)

Company Address GlaxoSmithKline Pakistan B/63, Estate Avenue S.I.T.E., 75700 Karachi Pakistan

Tel: +92 21 256 1200

Fax: +92 21 256 4797

www.gsk.com.pk



Pfizer

Strengths The largest pharmaceutical company in the world, with a significant regional presence and expertise.

Global scale to be further enhanced through Pfizer’s acquisition of Wyeth.

Direct manufacturing presence in Pakistan.

Diverse product portfolio.


Government’s failure to raise drug prices since 2001.


Biased treatment in favour of the local industry, which can influence government policy.

Strict labour laws and high corporate income tax rates.

Opportunities Positive economic performance, rising spending power and continuing sector modernisation.

A government freight-subsidy scheme for drug exports and plans to reimburse 100% of consultancy costs on private-sector development of certified/accredited testing facilities.



Persistently high inflation – as well as rising costs of raw and packaging materials – in Pakistan negatively impacting financial performance, given the government’s resistance to increase drug prices.

A volatile political and economic climate in Pakistan.


Company Overview Pfizer has a long history in the Pakistani pharmaceutical market. Its local presence is comprised

of three separate companies, namely Pfizer Laboratories, Parke Davis & Company and

Pharmacia (Pvt.) Pakistan. Pfizer has two manufacturing facilities in the country in Karachi and

Islamabad. Operated to international manufacturing standards, the plants produce solids, semi-

solids (ointment and creams) and liquid dosage forms (syrups, suspensions and emulsions).

In March 2006, Pfizer filed a lawsuit against the state-run Philippine International Trading

Corporation (PITC) regarding plans for parallel imports of generic versions of the hypertension

drug, Norvasc (amlodipine besylate) manufactured in Pakistan. The Philippine patent on the drug

was set to expire in 2007.

Pfizer acquired Wyeth in early 2009. The smaller US company has manufacturing facilities in

Pakistan.

Product Portfolio Pfizer Pakistan is engaged in the production and distribution of ethical pharmaceuticals

(belonging to a number of leading therapeutic areas) and consumer healthcare products.

Leading Products Celebrex (celecoxib)

Lipitor (atorvastatin)

Diflucan (fluconazole)

Company Address Pfizer Laboratories Pakistan 12 Dockyard Road, West Wharf Karachi, Pakistan

Tel: +92 21 220 0121-5

Fax: +92 21 231 0063

www.pfizer.com.pk



Abbott Laboratories

Strengths Significant local presence and expertise, second only to GSK.

Direct manufacturing presence in Pakistan.

Diverse product portfolio, including diagnostic goods.




Strict labour laws and high corporate income tax rates.


A government freight subsidy scheme for drug exports and plans to reimburse 100% of consultancy costs on private-sector development of certified/accredited testing facilities.







Company Overview Abbott Laboratories (Pakistan), based in Karachi, started its operations in 1948 as a subsidiary

and marketing affiliate of Abbott Laboratories, which holds a 79% stake in the company. The

company employs 1,360 staff in Pakistan. Abbott is the second-largest drug company in Pakistan,

after GSK.

The firm has three divisions: pharmaceuticals, nutritional and others. Pharmaceuticals accounts

for 85% of turnover.

Recent Activities Abbott recently disclosed plans to invest US$0.75mn in the expansion of its existing plant in the

Landhi industrial area of Karachi. The expansion will allow the company to have its facility

certified by the US FDA, which will enhance its ability to export to developed countries.

The company is working to expand its export market and currently exports to seven countries,

with the bulk going to Sri Lanka. The company expects a significant increase of exports to African

and Asian countries.

Product Portfolio The company makes, imports and markets branded pharmaceutical, nutritional, diagnostic,

hospital and consumer products. Leading products include Erythrocin, Enoxabid, Epival, Loftyl

and Urixin. Others are Bremax (tulobuterol), Klaricid (clarithromycin), Ensure (meal replacement

shakes), and Flexin.

Financial Performance Abbott reported local sales of PKR6.55bn (US$104mn) in 2007. In Q308, pharmaceutical sales

rose 9%, while the sales of nutritionals and other products rose by 23%. Profit after tax reached



PKR298.8mn, up by 3% y-o-y. Domestic sales for the quarter were PKR1.9bn, with exports rising.

For the year to date, domestic sales were PKR5bn and exports PKR95mn. In full-year 2008,

sales topped PKR7bn (US$111mn), with operating profits falling to PKR548mn, down from

PKR1.75bn in the previous year, due to the depreciation of local currency.

In Q109, overall sales rose by 24% y-o-y, while sales of pharmaceuticals increased by 26% y-o-y.

In H109, domestic sales reached PKR3.722bn, up from PKR3.265bn on H108. In the same

period, exports rose from PRK45.301mn to PKR168.255mn. In Q309, pharmaceutical sales –

which account for 80% of the company’s total business – continued to grow (by 19% y-o-y). At the

same time, sales of nutritionals and other products also posted an increase, of 11% y-o-y.



Leading Products Erythrocin (erythromicyn)

Enoxabid (enoxacin)

Epival (valproic acid)

Loftyl (bulfomedil)

Urixin (pipemidic acid)

Flexin (indomethacin)

Company Address Abbott Laboratories (Pakistan) Ltd POB 7229 Karachi 3, Pakistan

Tel: +92 21 501 5045

Fax: +92 21 501 3245

www.abbott.com.pk



Novartis

Strengths One of the fastest growing global pharmaceutical companies, ranked fifth largest in the world.

Offers a full spectrum of therapeutic products.

Diverse manufacturing presence, including antibiotics, vitamins, OTCs and consumer healthcare products.




Biased treatment in favour of the local industry, which can influence government policy.

Strict labour laws and a high corporate income tax rate.



Potential to expand in the generics market.


Significant counterfeit drug industry and the lack of improvement in this field.





Company Overview Novartis Pakistan is a subsidiary of the Switzerland-based Novartis International AG. Novartis

was established following the merger of Sandoz and Ciba-Geigy in 1997. The firm produces and

distributes speciality pharmaceuticals, consumer healthcare and generic products. The group’s

other activities include the distribution of dyes and chemicals, agrochemicals, additives, plastics

and pigments. The company also acts as an indenting agent for a range of products for its

associates and other companies. Novartis has one fully owned subsidiary, Farm Chemicals

(Private).

Product Portfolio Novartis’ products include medicines in transplantation and immunology, cardiovascular

diseases, diseases of the CNS, Parkinson’s, skin allergies, OTC and ophthalmic medications.

The company has a strong presence in the Pakistan market, with many of the following products

maintaining a leadership position in their respective segments: Lamisil, Clozaril (clozapine),

Diovan, Lescol (fluvastatin), Aredia (pamidronate disodium), Navoban, Sandostatin

(simvastatin), Neoral (cyclosporin), Femara (letrozole), Sandoglobulin (immune globulin),

Miacalcic, Lentaron (formestane).

Leading Products Diovan (valsartan)

Navoban (tropisetron)

Miacalcic (calcitonin)

Lamisil (terbinafine)

Simulect (basiliximab)



Company Address Novartis Pakistan Ltd 15 West Wharf 74000 Karachi Pakistan

Tel: +92 21 231 3386

Fax: +92 21 231 1009

www.novartis.com



Sanofi-Aventis

Strengths The third largest drug manufacturer in the world.

Broad portfolio of products, including antibiotics, vitamins and OTCs.

Present in the generics as well as the vaccines segment.







Rising demand for generics.


Threats State resistance to aligning domestic patent law with international standards.

Significant counterfeit drug industry and the lack of improvement in this field.


Company’s profit and investment vulnerable to currency fluctuations.

Company Overview As a result of the merger with Aventis in H204, Aventis’ Pakistan operations have become a part

of the Sanofi-Aventis group. The merger has created the third largest drug company in the

world, which gives Sanofi-Aventis a strong position in the Pakistani market. The Pakistani

company is a subsidiary of Aventis Pharma Holding. In 2008, the company employed over 1,200

staff.

Product Portfolio Sanofi-Synthélabo has expertise in four major therapeutic areas: cardiovascular/thrombosis,

CNS, oncology and internal medicine. Its principal products include Haemacell (blood

substitute), Novalgin, Lasix (furosemide), Cidomycin, Tarivid (ofloxacin) tablets, Targocid

(teicoplanin) and Tavanic. Meanwhile, Sanofi-Aventis has developed a cervical cancer vaccine,

Gardasil, which Pakistani doctors hope will soon be available in the country. Cervical cancer

rates are rising in Pakistan, although the current price of a Gardasil injection – around PKR5,000

(US$82.20) – may prove too expensive for many patients.

Financial Performance In 2008, Sanofi Pakistan reported net sales of PKR4.3bn (US$69mn), +11.56% y-o-y. Amaryl

(glimepiride) posted a 10% growth, while Aprovel (irbesartan) sales reached PKR66.9mn. Sales

of Claforan (cefotaxime) were up by 9%, to PKR432.9mn.

In Q109, sales topped PKR1.185bn, compared with PKR874.9mn achieved in Q108, although

profit before taxation was negatively impacted by currency devaluation. In Q109, it fell to

PKR8.6mn, down from PKR20.1mn posted for the same period of 2008.




Leading Products Novalgin (famotidine)



Cidomycin (gentamicin sulphate)

Tavanic (levofloxacin)

Company Address Sanofi-Aventis Pakistan Plot 23, Sector 22 Korangi Industrial Area Hoechst House, 74900 Karachi,Pakistan

Tel: +92 21 506 0221-35

Fax: +92 21 506 0358

www.sanofi-aventis.com.pk



Wyeth

Strengths Diverse presence, including vaccines.

Financial capability, business portfolio and industry experience to take advantage of the potential the Pakistani pharmaceutical market offers.

Global scale to be further enhanced through Pfizer’s acquisition of Wyeth.









Volatile political and economic climate in Pakistan.


Company Overview Wyeth (Pakistan) – formerly known as Cyanamid Pakistan, Wyeth-Lederle Division – was created

from the merger of Cyanamid and Wyeth-Lederle in 1995. The company, based in Karachi,

manufactures pharmaceuticals and claims to be one of the top 10 producers in the country.

Employing about 900 people, Wyeth generates annual sales of about US$40mn. Pharmaceuticals

comprise about 80% of the company’s net sales. Wyeth’s main product areas are anti-

tuberculosis products, antibiotics, vitamins, antacids, anti-diarrhoeals, CNS treatments, oral

contraceptives, hormone replacement therapy, and cough and cold remedies.

In 2000, the Export Promotion Bureau identified the company as the country’s leading

pharmaceutical exporter. Exports account for about 15% of total production and the main markets

are Russia, South Africa and the Philippines.

Recent Activities In early 2009, it emerged that Pfizer was to acquire Wyeth. In Pakistan, Wyeth’s TB products

manufactured locally came under WHO scrutiny in April 2009, with the organisation stating that it

cannot guarantee their quality, as Wyeth Pakistan changed storing conditions and introduced new

APIs without WHO consultation. Consequently, four products have been suspended. A 2005

WHO inspection of Wyeth Pakistan found irregularities, although it is unclear whether they have

been addressed.

Product Portfolio Wyeth’s product portfolio in Pakistan includes an anti-infective Tygacil (tigecycline) and a

contraceptive Premarin (conjugated oestrogens), both of which were launched in the course of

2008.

Financial Performance During 2006, sales reached PKR1.95bn (US$31mn), up 9.5% on the previous year’s figure. Profit

similarly increased to reach US$6mn. In the following two years, Wyeth Pakistan posted

PKR2.11bn (US$35bn) and PKR2.38bn (US$38) in sales. Profit after tax fell in 2008, due to

unfavourable exchange rate fluctuations.



For the first three months of 2009 (ending March), net sales topped PKR727.9mn, rising from

PKR557.3mn in Q108. Gross profit rose to around PRK206mn, from PKR175mn, although Q109

profit after taxation was lower than in Q108.

Company Address Wyeth (Pakistan) Ltd, S-33 Hawkes Bay Road, S.I.T.E. 75730 Karachi, Pakistan

Tel: +92 21 256 7411

Fax: +92 21 256 4428

www.wyethpakistan.com



-15.0 -10.0 -5.0 0.0 5.0 10.0 15.0

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75+

Population by age, 2005

Male Female

-30.0 -20.0 -10.0 0.0 10.0 20.0 30.0

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75+

Population by age, 2005:2030 (total)

2030 2005

Country Snapshot: Pakistan Demographic Data

Section 1: Population

Figures in millions. Source: UN Population Division

Table: Demographic Indicators, 2005-2030

2005 2010f 2020f 2030f

Dependent population, % of total 42.4 40.1 36.3 34.2

Dependent population, total, ‘000 66,107 69,955 75,711 82,256

Active population, % of total 57.5 59.8 63.6 65.7

Active population, total, ‘000 89,663 104,386 132,605 158,020

Youth population*, % of total 39.0 36.6 31.4 27.8

Youth population*, total, ‘000 60,793 63,853 65,567 66,902

Pensionable population, % of total 3.4 3.5 4.8 6.3

Pensionable population, total, ‘000 5,314 6,102 10,144 15,354

f = forecast. * Youth = under 15. Source: UN Population Division

Table: Rural/Urban Breakdown, 2005-2030

2005 2010f 2020f 2030f

Urban population, % of total 34.8 36.9 42.8 49.8



Rural population, % of total 65.2 63.1 57.2 50.2

Urban population, total, ‘000 54,960 64,711 89070 119652

Rural population, total, ‘000 102,975 110,467 119245 120624

Total population, ‘000 157,935 175,178 208,315 240,276

f = forecast. Source: UN Population Division

Section 2: Education and Healthcare

Table: Education, 2002-2005

2002-2003 2004-2005

Gross enrolment, primary, % 82 86

Gross enrolment, secondary, % 27 26

Gross enrolment, tertiary, % 3 4

Gross enrolment is the number of pupils enrolled in a given level of education regardless of age expressed as a percentage of the population in the theoretical age group for that level of education. Source: UNESCO

Table: Vital Statistics, 2005-2030

2005 2010f 2020f 2030f

Life expectancy at birth, males (years) 62.7 64.6 68.4 70.8

Life expectancy at birth, females (years) 63.1 64.9 69.1 72.0

Life expectancy estimated at 2005. f = forecast. Source: UNESCO



Table: Employment Indicators, 2001-2006

2001 2002 2003 2004 2005 2006

Economically active population, ‘000 42,388 42,388 na 45,508 na 50,055

– % change y-o-y 6 na -100 na na -100.00

– % of total population 30 29 na 30 na 32

Employment, ‘000 37,481 38,882 39,852 42,009 42,916 46,952

– % change y-o-y 2 4 2 5 5 9

– male 32,233 33,189 34,017 34,903 34,903 37,808

– female 5,248 5,693 5,835 7,106 7,106 9,144

– female, % of total 14 15 15 17 17 19

Total employment, % of labour force 88 92 na 92 92 94

Unemployment, ‘000 3,181 3,506 3,594 3,499 3,499 3,103

– male 2,082 2,381 2,441 2,461 2,461 2,166

– female 1,099 1,125 1,153 1,038 1,038 937

– unemployment rate, % 8 8 8 8 8 6

na = not available. Source: ILO



Section 3: Labour Market And Spending Power

Table: Average Annual Manufacturing Wages, 2000-2012

2000 2007e 2008f 2009f 2010f 2011f 2012f

Local currency 35,772 79,561 88,113 97,143 106,673 112,996 123,258

Wage growth, % y-o-y 4.0 11.3 10.7 10.2 9.8 5.9 9.0

US$ 653 1,311 1,442 1,567 1,701 1,788 1,941

e/f = BMI estimate/forecast. Source: ILO, BMI

Table: Consumer Expenditure, 2000-2012 (US$)

2000 2007e 2008f 2009f 2010f 2012f

Consumer expenditure per capita 410 684 722 766 809 902

Poorest 20%, expenditure per capita 191 318 336 356 376 420

Richest 20%, expenditure per capita 826 1,377 1,454 1,544 1,630 1,818

Richest 10%, expenditure per capita 1,078 1,798 1,898 2,016 2,127 2,373

Middle 60%, expenditure per capita 344 574 606 644 679 758

Purchasing power parity

Consumer expenditure per capita 1,575 2,217 na na na na

Poorest 20%, expenditure per capita 732 1031 na na na na

Richest 20%, expenditure per capita 3,173 4,467 na na na na

Richest 10%, expenditure per capita 4,141 5,830 na na na na

Middle 60%, expenditure per capita 1,323 1,862 na na na na

e/f = estimate/forecast. na = not available. Source: World Bank, Country data; BMI calculation



BMI Methodology

How We Generate Our Pharmaceutical Industry Forecasts

Pharmaceutical sub-sector forecasts are generated using a top-down approach from BMI’s Drug

Expenditure Forecast Model. The semi-automated tool incorporates historic trends, macroeconomic

variables, epidemiological forecasts and analyst input, which are weighted by relevance to each market.

The following elements are fed into the model:

BMI’s historic pharmaceutical market data, which has been collected from a range of sources

including:

– regulatory agencies

– pharmaceutical trade associations

– company press releases and annual reports

– subscription information providers

– local news sources

– information from market research firms that is in the public domain.

Data that has been validated by BMI’s pharmaceutical and healthcare analysts using a composite

approach, which scores data sources by reliability in order to ensure accuracy and consistency of

historic data.

Five key macroeconomic and demographic variables, which have been demonstrated, through

regression analysis, to have the greatest influence on the pharmaceutical market. These have been

forecast by BMI’s Country Risk analysts using an in-house econometric model.

The burden of disease in a country. This is forecast in disability-adjusted life years (DALYs) using

BMI’s ‘Burden of Disease Database’, which is based on the World Health Organization’s burden of

disease projections and incorporates World Bank and IMF data.

Subjective input and validation by BMI’s pharmaceutical and healthcare analysts to take into account

key events that have affected the pharmaceutical market in the recent past or that are expected to have

an impact on the country’s pharmaceutical market over the next five years. These may include

policy/reimbursement decisions, new product launches or increased competition from generics.



Pharmaceutical Business Environment Ratings Methodology

Our approach in assessing the Pharmaceutical Business Environment Ratings is threefold. First, we have

defined the risks rated to capture the operational dangers to companies operating in this industry. Second,

we attempt where possible to identify objective indicators that may serve as proxies for issues/trends.

Finally, we use BMI’s proprietary Country Risk Ratings (CRR) to ensure only the aspects most relevant

to the industry are included. Overall, the system, which is integrated with all the industries covered by

BMI, offers an industry-leading insight into the prospects/risks for companies across the globe.

Ratings Overview

Ratings System

Conceptually, the new ratings system divides into two distinct areas:

Limits of Potential Returns: Evaluation of sector’s size and growth potential in each state, and also

broader industry/state characteristics that may inhibit its development.

Risks to Realisation of Returns: Evaluation of industry-specific dangers and those emanating from the

state’s political/economic profile that call into question the likelihood of anticipated returns being realised

over the assessed time period.

Indicators The following indicators have been used. Overall, the rating uses three subjectively measured indicators,

and 41 separate indicators/datasets.



Table: Pharmaceutical Business Environment Indicators

Indicator Rationale

Limits of Potential Returns

Market Structure

Market expenditure, US$bn Denotes breadth of pharmaceutical market. Large markets score higher than smaller ones

Market expenditure per capita, US$ Denotes depth of pharmaceutical market. High value markets score better than low value ones

Sector value growth, % y-o-y Denotes sector dynamism. Scores based on annual average growth over five-year forecast period

Country Structure

Urban-rural split Urbanisation is used as a proxy for development of medical facilities. Predominantly rural states therefore score lower

Pensionable population, % of total Proportion of the population over 65 years of age. States with aging populations tend to have higher per-capita expenditure

Population growth, 2003-2015 Fast-growing states suggest better long-term trend growth for all industries

Overall score for country structure is also affected by the coverage of the power transmission network across the state

Risks to Realisation of Returns

Market Risks

Intellectual property (IP) laws Markets with fair and enforced IP regulations score higher than those with endemic counterfeiting

Policy/reimbursements Markets with full and equitable access to modern medicines score higher than those with minimal state support for healthcare

Approvals process High scores awarded to markets with a swift appraisal system. Those that are weighted in favour of local industry or are corrupt score lower

Country Risk

Economic structure Rating from CRR evaluates the structural balance of the economy, noting issues such as reliance on single sectors for exports/growth, and past economic volatility

Policy continuity Rating from CRR evaluates the risk of a sharp change in the broad direction of government policy

Bureaucracy Rating from CRR denotes ease of conducting business in the state

Legal framework Rating from CRR denotes the strength of legal institutions in each state. Security of investment can be a key risk in some emerging markets

Corruption Rating from CRR denotes the risk of additional illegal costs/possibility of opacity in tendering/business operations affecting companies’ ability to compete

Source: BMI



Weighting

Given the number of indicators/datasets used, it would be wholly inappropriate to give all sub-

components equal weight. Consequently, the following weight has been adopted.

Table: Weighting Of Components

Component Weighting

Limits of Potential Returns 60%

– Pharmaceutical Market – 75%

– Country Structure – 25%

Risks to Realisation of Returns 40%

– Market Risks – 60%

– Country Risk – 40%

Source: BMI

Sources

Sources used include national industry associations, government ministries, global health organisations,

officially released pharmaceutical company results and international and national news agencies.



Tabl

e: P

akis

tan

– D

rug

Expe

nditu

re In

dica

tors

, His

toric

al D

ata

and

Fore

cast

s

2005

2006

2007

2008

2009

2010

f20

11f

2012

f20

13f

2014

f20

15f

2016

f20

17f

2018

f20

19f

Dru

g ex

pend

iture

(US

$bn)

1.4

1 1

.61

1.8

4 1

.80

1.6

2 1

.64

1.6

4 1

.67

1.7

2 1

.78

1.8

5 1

.92

2.0

0 2

.08

2.1

2 D

rug

expe

nditu

re (P

KR

bn)

83.

90

96.

70

112

.30

126

.70

132

.10

144

.33

155

.55

167

.67

181

.13

196

.39

212

.25

230

.04

249

.97

272

.22

290

.08

Dru

g ex

pend

iture

per

cap

ita (U

S$)

9.2

4 1

0.33

1

1.61

1

1.20

9

.88

9.8

3 9

.65

9.6

6 9

.77

9.9

6 1

0.13

1

0.35

1

0.59

1

0.86

1

0.88

D

rug

expe

nditu

re %

GD

P 1

.29

1.2

7 1

.30

1.2

3 1

.01

0.9

7 0

.95

0.9

4 0

.93

0.9

2 0

.90

0.8

8 0

.86

0.8

5 0

.81

f = fo

reca

st. S

ourc

e:IM

S H

ealth

Asi

a, P

akis

tan

Phar

mac

eutic

al M

anuf

actu

rers

Ass

ocia

tion

(PPM

A), B

MI

Tabl

e: P

akis

tan

– H

ealth

Exp

endi

ture

Indi

cato

rs, H

isto

rical

Dat

a an

d Fo

reca

sts

2005

2006

2007

2008

2009

2010

f20

11f

2012

f20

13f

2014

f

Hea

lth e

xpen

ditu

re (U

S$b

n)

2.3

0 2

.56

2.8

8 2

.84

2.7

7 2

.92

3.0

7 3

.30

3.5

8 3

.89

Hea

lth e

xpen

ditu

re (P

KR

bn)

136

.93

154

.21

176

.32

199

.77

226

.52

257

.04

291

.89

331

.72

377

.28

429

.42

Hea

lth e

xpen

ditu

re (%

GD

P)

2.1

1 2

.02

2.0

3 1

.94

1.7

3 1

.74

1.7

9 1

.86

1.9

5 2

.01

Hea

lth e

xpen

ditu

re p

er c

apita

(US

$) 1

5.08

1

6.48

1

8.23

1

7.65

1

6.94

1

7.50

1

8.12

1

9.11

2

0.34

2

1.77

P

ublic

sec

tor h

ealth

exp

endi

ture

(US

$bn)

0

.40

0.4

2 0

.48

0.4

6 0

.44

0.4

6 0

.47

0.5

0 0

.54

0.5

8 P

ublic

sec

tor h

ealth

exp

endi

ture

(%)

17.

51

16.

45

16.

77

16.

31

15.

92

15.

61

15.

36

15.

18

15.

06

15.

00

f = fo

reca

st. S

ourc

e: W

orld

Hea

lth O

rgan

izat

ion

(WH

O),

BMI


© Business Monitor International Ltd Page 83 © Business Monitor International Ltd Page xx


Tabl

e: P

akis

tan

– Pr

escr

iptio

n M

arke

t Ind

icat

ors,

His

toric

al D

ata

and

Fore

cast

s (U

S$m

n un

less

oth

erw

ise

stat

ed)

2006

2007

2008

2009

2010

f20

11f

2012

f20

13f

2014

f20

15f

2016

f20

17f

2018

f20

19f

Pre

scrip

tion

drug

mar

ket

(US

$bn)

1

.29

1.4

8 1

.45

1.3

0 1

.31

1.3

1 1

.34

1.3

8 1

.43

1.4

8 1

.54

1.6

1 1

.68

1.7

1

Pre

scrip

tion

drug

mar

ket

(PK

Rbn

) 7

7.75

9

0.37

1

01.8

2 1

06.0

5 1

15.7

9 1

24.7

5 1

34.4

7 1

45.3

2 1

57.6

7 1

70.5

8 1

85.1

3 2

01.5

2 2

19.6

8 2

34.3

9

Pre

scrip

tion

drug

mar

ket a

s %

tota

l 8

0.41

8

0.47

8

0.36

8

0.28

8

0.23

8

0.20

8

0.20

8

0.23

8

0.28

8

0.37

8

0.48

8

0.62

8

0.70

8

0.80

Alim

enta

ry tr

act a

nd m

etab

o-lis

m d

rug

sale

s (P

KR

mn)

8,9

87.5

2 10

,446

.19

11,7

69.6

2 12

,258

.73

13,3

84.3

7 14

,420

.63

15,5

43.9

7 16

,798

.14

18,2

25.5

4

Blo

od a

nd b

lood

form

ing

orga

n dr

ug s

ales

(PK

Rm

n) 7

,348

.27

8,5

40.9

0 9

,622

.94

10,0

22.8

4 10

,943

.18

11,7

90.4

3 12

,708

.88

13,7

34.3

0 14

,901

.35

Car

diov

ascu

lar s

yste

m d

rug

sale

s (P

KR

mn)

15,2

34.7

5 17

,707

.34

19,9

50.6

8 20

,779

.77

22,6

87.8

5 24

,444

.41

26,3

48.5

8 28

,474

.52

30,8

94.1

1

Der

mat

olog

ical

dru

g sa

les

(PK

Rm

n) 1

,894

.20

2,2

01.6

2 2

,480

.55

2,5

83.6

3 2

,820

.87

3,0

39.2

7 3

,276

.02

3,5

40.3

5 3

,841

.19

Gen

ito-u

rinar

y sy

stem

and

sex

ho

rmon

e sa

les

(PK

Rm

n) 3

,046

.64

3,5

41.1

1 3

,989

.73

4,1

55.5

3 4

,537

.11

4,8

88.3

8 5

,269

.18

5,6

94.3

2 6

,178

.19

Sys

tem

ic h

orm

onal

pre

para

-tio

n, e

xclu

ding

sex

hor

mon

es

and

insu

lins,

sal

es (P

KR

mn)

2,0

46.6

7 2

,378

.84

2,6

80.2

2 2

,791

.60

3,0

47.9

3 3

,283

.92

3,5

39.7

2 3

,825

.33

4,1

50.3

8

Ant

i-inf

ectiv

e fo

r sys

tem

ic u

se

sale

s (P

KR

mn)

8,3

98.0

8 9

,761

.09

10,9

97.7

2 11

,454

.75

12,5

06.5

7 13

,474

.87

14,5

24.5

3 15

,696

.44

17,0

30.2

3

Ant

ineo

plas

tic a

nd im

mu-

nom

odul

atin

g ag

ent s

ales

(P

KR

mn)

7,4

58.7

6 8

,669

.31

9,7

67.6

3 10

,173

.54

11,1

07.7

1 11

,967

.71

12,8

99.9

6 13

,940

.80

15,1

25.4

0

Mus

culo

skel

etal

sys

tem

dru

g sa

les

(PK

Rm

n) 3

,828

.90

4,4

50.3

3 5

,014

.14

5,2

22.5

2 5

,702

.07

6,1

43.5

4 6

,622

.11

7,1

56.4

1 7

,764

.52

Ner

vous

sys

tem

dru

g sa

les

(PK

Rm

n)

10,8

67.7

2

12,6

31.5

5

14,2

31.8

4

14,8

23.2

7

16,1

84.4

0

17,4

37.4

5

18,7

95.7

8

20,3

12.3

3

22,0

38.3

4

Ant

ipar

asiti

c pr

oduc

t, in

sec-

ticid

e an

d re

pelle

nt s

ales

(P

KR

mn)

94.

86

110

.25

124

.22

129

.38

141

.26

152

.20

164

.06

177

.29

192

.36

Res

pira

tory

sys

tem

dru

g sa

les

(PK

Rm

n) 6

,132

.15

7,1

27.4

0 8

,030

.37

8,3

64.0

8 9

,132

.11

9,8

39.1

5

10,6

05.5

9

11,4

61.3

1

12,4

35.2

2

Sen

sory

org

an d

rug

sale

s (P

KR

mn)

1,2

70.6

3 1

,476

.85

1,6

63.9

5 1

,733

.10

1,8

92.2

4 2

,038

.74

2,1

97.5

5 2

,374

.86

2,5

76.6

6

Oth

er p

resc

riptio

n dr

ug s

ales

(P

KR

mn)

1,1

43.0

3 1

,328

.55

1,4

96.8

6 1

,559

.07

1,7

02.2

3 1

,834

.02

1,9

76.8

8 2

,136

.39

2,3

17.9

3

f = fo

reca

st. S

ourc

e:IM

S H

ealth

Asi

a, P

akis

tan

Phar

mac

eutic

al M

anuf

actu

rers

Ass

ocia

tion

(PPM

A), B

MI


© Business Monitor International Ltd Page xx © Business Monitor International Ltd Page 84


Tabl

e: P

akis

tan

– O

TC D

rugs

Mar

ket I

ndic

ator

s, H

isto

rical

Dat

a an

d Fo

reca

sts

(US$

mn

unle

ss o

ther

wis

e st

ated

)

2005

2006

2007

2008

2009

2010

f20

11f

2012

f20

13f

2014

f20

15f

2016

f20

17f

2018

f20

19f

OTC

mar

ket (

US

$bn)

0

.30

0.3

3 0

.38

0.4

1 0

.32

0.3

2 0

.32

0.3

3 0

.34

0.3

5 0

.36

0.3

7 0

.39

0.4

0 0

.41

OTC

mar

ket (

PK

Rbn

) 1

7.57

1

9.59

2

2.96

2

9.01

2

6.05

2

8.54

3

0.80

3

3.20

3

5.81

3

8.72

4

1.67

4

4.91

4

8.45

5

2.54

5

5.70

OTC

mar

ket a

s %

tota

l mar

ket

19.

80

19.

59

19.

53

19.

64

19.

72

19.

77

19.

80

19.

80

19.

77

19.

72

19.

63

19.

52

19.

38

19.

30

19.

20

Ana

lges

ics

(PK

Rm

n)4,

344.

56

4,84

4.87

5,

676.

81

7,17

2.68

6,

440.

94

7,05

6.54

7,

615.

75

8,20

8.64

8,

855.

22

9,57

3.97

Cou

gh &

col

d dr

ugs

(PK

Rm

n)3,

279.

61

3,65

7.28

4,

285.

29

5,41

4.49

4,

862.

12

5,32

6.82

5,

748.

95

6,19

6.51

6,

684.

60

7,22

7.16

Dig

estiv

es (P

KR

mn)

3,41

2.82

3,

805.

82

4,45

9.34

5,

634.

40

5,05

9.59

5,

543.

18

5,98

2.45

6,

448.

19

6,95

6.10

7,

520.

70

Ski

n tre

atm

ents

(PK

Rm

n)2,

592.

23

2,89

0.74

3,

387.

13

4,27

9.65

3,

843.

05

4,21

0.36

4,

544.

02

4,89

7.77

5,

283.

56

5,71

2.41

Vita

min

s an

d m

iner

als

(PK

Rm

n)3,

062.

47

3,41

5.13

4,

001.

57

5,05

6.00

4,

540.

20

4,97

4.13

5,

368.

31

5,78

6.25

6,

242.

02

6,74

8.66

Oth

er O

TCs

(PK

Rm

n) 8

78.5

1 9

79.6

8 1,

147.

90

1,45

0.38

1,

302.

42

1,42

6.90

1,

539.

97

1,65

9.86

1,

790.

61

1,93

5.94

f = fo

reca

st. S

ourc

e:IM

S H

ealth

Asi

a, P

akis

tan

Phar

mac

eutic

al M

anuf

actu

rers

Ass

ocia

tion

(PPM

A), B

MI

Tabl

e: P

akis

tan

– Pa

tent

ed D

rugs

Mar

ket I

ndic

ator

s, H

isto

rical

Dat

a an

d Fo

reca

sts

2005

2006

2007

2008

2009

2010

f20

11f

2012

f20

13f

2014

f20

15f

2016

f20

17f

2018

f20

19f

Pat

ente

d m

arke

t (U

S$b

n) 0

.19

0.2

2 0

.26

0.2

5 0

.23

0.2

4 0

.24

0.2

5 0

.26

0.2

8 0

.29

0.3

1 0

.33

0.3

5 0

.37

Pat

ente

d m

arke

t (P

KR

bn)

28.

36

34.

07

40.

60

40.

91

37.

80

39.

48

40.

81

43.

05

45.

93

49.

45

53.

28

57.

54

62.

34

67.

36

71.

29

Pat

ente

d m

arke

t as

% to

tal m

arke

t 1

3.20

1

3.66

1

3.97

1

4.11

1

4.28

1

4.48

1

4.70

1

4.94

1

5.22

1

5.52

1

5.84

1

6.20

1

6.58

1

6.90

1

7.24

f =

fore

cast

. Sou

rce:

IMS

Hea

lth A

sia,

Pak

ista

n Ph

arm

aceu

tical

Man

ufac

ture

rs A

ssoc

iatio

n (P

PMA)

, BM

I

Tabl

e: P

akis

tan

– G

ener

ic D

rugs

Mar

ket I

ndic

ator

s, H

isto

rical

Dat

a an

d Fo

reca

sts

2005

2006

2007

2008

2009

2010

f20

11f

2012

f20

13f

2014

f20

15f

2016

f20

17f

2018

f20

19f

Gen

eric

s m

arke

t (U

S$b

n)

0.9

4 1

.07

1.2

2 1

.19

1.0

7 1

.08

1.0

7 1

.09

1.1

2 1

.15

1.1

9 1

.23

1.2

8 1

.33

1.3

5 G

ener

ics

mar

ket (

PK

Rbn

)14

3.93

16

6.54

19

3.20

19

2.03

17

4.69

17

9.35

18

1.91

18

8.02

19

6.23

20

6.40

21

6.98

22

8.34

24

0.78

25

4.24

26

2.76

G

ener

ics

mar

ket a

s %

tota

l mar

ket

67.

00

66.

75

66.

50

66.

25

66.

00

65.

75

65.

50

65.

26

65.

01

64.

77

64.

52

64.

28

64.

04

63.

80

63.

56

f = fo

reca

st. S

ourc

e:IM

S H

ealth

Asi

a, P

akis

tan

Phar

mac

eutic

al M

anuf

actu

rers

Ass

ocia

tion

(PPM

A), B

MI



Tabl

e: P

akis

tan

– Ph

arm

aceu

tical

Tra

de In

dica

tors

, His

toric

al D

ata

and

Fore

cast

s (U

S$m

n)

2005

2006

2007

2008

2009

2010

f20

11f

2012

f20

13f

2014

f

Exp

orts

(US

$mn)

49.

20

49.

60

58.

90

75.

50

84.

59

95.

55

108

.81

124

.92

144

.55

168

.61

Impo

rts (U

S$m

n) 1

72.3

0 1

77.5

0 2

14.5

0 2

52.2

0 2

90.2

3 3

34.8

2 3

87.2

0 4

48.8

7 5

21.6

3 6

07.6

6 B

alan

ce (U

S$m

n)-1

23.1

0 -1

27.9

0 -1

55.6

0 -1

76.7

0 -2

05.6

4 -2

39.2

7 -2

78.3

9 -3

23.9

6 -3

77.0

8 -4

39.0

5 f =

fore

cast

. Sou

rce:

UN

Com

trade

, Int

erna

tiona

l Tra

de C

entre

(ITC

), BM

I

Tabl

e: P

akis

tan

– O

ther

Hea

lthca

re In

dica

tors

, His

toric

al D

ata

and

Fore

cast

s

2005

2006

2007

2008

2009

f20

10f

2011

f20

12f

2013

f20

14f

Hos

pita

ls 1

2,63

7.00

1

2,72

6.00

1

2,80

4.00

1

2,86

8.02

1

2,93

2.36

1

2,99

7.02

1

3,06

2.01

1

3,12

7.32

1

3,19

2.95

1

3,25

8.92

B

eds

per 1

,000

pop

ulat

ion

0.6

7 0

.66

0.6

5 0

.65

0.6

5 0

.64

0.6

4 0

.64

0.6

3 0

.63

Doc

tors

per

1,0

00 p

opul

atio

n 0

.64

0.6

6 0

.66

0.6

8 0

.69

0.7

0 0

.71

0.7

3 0

.74

0.7

5 B

irths

per

1,0

00 p

opul

atio

n 2

6.10

2

5.90

2

5.70

2

5.50

2

5.30

2

5.10

2

4.90

2

4.70

2

4.50

2

4.30

D

eath

s pe

r 1,0

00 p

opul

atio

n 7

.10

7.1

5 7

.20

7.2

5 7

.30

7.3

5 7

.40

7.4

5 7

.50

7.5

5 f =

fore

cast

. Sou

rce:

Pak

ista

n Fe

dera

l Bur

eau

of S

tatis

tics,

BM

I

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.

includes 10-year forecasts to 2019 -...

Documents